2017 Preliminary Results Presentation. 13 th March 2018

Transcription

1 2017 Preliminary Results Presentation 13 th March 2018

2 2 Disclaimer This presentation (hereinafter this document ) has been prepared by Applegreen plc (the Company ) for information purposes only. This document has been prepared in good faith but the information contained in it has not been independently verified and does not purport to be comprehensive. This document is neither a prospectus nor an offer nor an invitation to apply for securities. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness. No representation or warranty, express or implied, is given by or on behalf of the Company or any of its directors, officers or employees, any of its advisers or any other person as to the accuracy or completeness of the information or opinions contained in this document and no responsibility or liability whatsoever is accepted by the Company or any of its members, directors, officers or employees, any of its advisers nor any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. Certain information contained herein may constitute forward-looking statements which can be identified by the use of terms such as may, will, should, expect, anticipate, estimate, intend, continue, target or believe (or negatives thereof) or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or actual performance of the Company may differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of, and no reliance should be placed on, such forward-looking statements. A number of factors could cause results and developments of the Company to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in regulation, currency fluctuations, changes in its business strategy, political and economic uncertainty and other factors.

3 3 Agenda 1. Highlights 2. Trading & Development Review 3. Financial Review 4. Outlook 5. Appendices

4 Highlights S.A. GOREY, IRELAND BK, Subway, Bakewell, Lavazza

5 Highlights was another year of strong performance as we continue to deliver on our growth strategy Ongoing focus on non-fuel is delivering results: Non fuel L4L gross margin growth of 7.4% 77 new food offers opened across the estate Larger scale service area developments are primary focus in ROI and UK Accelerated our US expansion with 68 sites trading at year end Ongoing enhancement of relationships with our franchise partners Brandi and Carsley acquisitions completed in Q and are trading in line with expectations Strong Fuel performance with favourable margin environment in H1 and attractive returns from JFT investment in H2

6 Distinctive convenience retail offering in the forecourt sector Low Fuel Prices, Always Local price promise Better Value Always Tailored retail offer Impulse/ ultra-convenience focus Food and beverage focus 260 food outlets across the estate Mix of own and international brands Tailored offer to each location Number of Food Offers at 31 December 2017 (260 total)

7 Republic of Ireland S.A. GOREY, IRELAND

8 Republic of Ireland 8 Service Areas Motorway & Trunk Road Service Areas Continued market leading position in ROI including 9 MSA sites Highly evolved food and retail offerings on national roads Three new TRSAs came on stream during the year including one which has been upgraded from an existing PFS site Strong pipeline of TRSA opportunities Tesla charge points opening at five of our MSA sites in ROI Petrol Filling Stations Company Owned Seven new sites added in FY 2017 and seven PFS rebrands completed Petrol Filling Stations Dealer Owned 12 new dealer sites opened during the year as we continue to enhance our national coverage 19% of ROI volumes in FY 2017 sold through dealer sites Commercial Fuelcard Continued growth in profitability and now accounts for 9% of ROI fuel volumes in FY 2017 RoI Site Numbers 88% of the ROI estate is now branded Applegreen (2016: 85%) Dec-15 Dec-16 Dec-17 PFS - Company Owned PFS - Dealer Owned SA RoI Cap Ex m 22.3m 22.7m m m 12.0m m m 10.7m PFS SA

9 U.K. SPALDING LINCOLNSHIRE Greggs, Subway and Costa Cafe

10 UK 10 Service Areas Motorway & Trunk Road Service Areas One new MSA opened in Northern Ireland on M1 Inbound to Belfast in February 2017 three MSAs now operational in NI Focus on expanding in SA market in Great Britain. Three existing PFS sites upgraded to TRSAs during the year and the first new build TRSA in GB opened in July 2017 Carsley Group acquisition expands our service area potential in GB Four MSA sites are in the early stages of planning process Petrol Filling Stations Company Owned 15 new sites added in the period and seven PFS rebrands completed The seven Carsley sites have been successfully integrated and are trading in line with expectations Strong competition for new assets in the market Good LFL growth in non-fuel gross margin over the course of FY 2017 UK Site Numbers % of the UK estate now branded Applegreen (2016: 39%) UK Cap Ex 22.1m 13.5m 8.6m m 13.0m 13.0m 86 Dec-15 Dec-16 Dec-17 PFS - Company Owned SA 44.4m 7.4m 37.0m PFS - Company Owned SA

11 USA HEMPSTEAD L.I.

12 USA 12 North East 26 sites now trading acquired through single site opportunities or strategic partnership with CrossAmerica Partners Significant fuel focus with strong margins particularly in H Eleven convenience store trading well and future strategic relationship developing 15 sites added in FY 2017, 12 sites through CrossAmerica Partners and three single site acquisitions South East 34 PFS sites and 8 stand alone Burger King restaurants Brandi acquisition completed in October 2017 integrated successfully and trading in line with expectations Applegreen resources transferred to the US to support local management team USA Site Numbers USA Cap Ex Dec-15 Dec-16 Dec m 1.0m 10.5m

13 FINANCIAL REVIEW

14 Profit and Loss Account FY 2017 m FY 2016 m %Var Revenue 1, , % Gross Profit % Selling & Distribution Costs (100.1) (80.4) 24.5% Administrative Expenses (25.8) (20.8) 24.0% Other income Adjusted EBITDAR % Rent (18.2) (13.8) Adjusted EBITDA % Depreciation & Amortisation (14.1) (11.1) Impairment 0.0 (0.4) Finance Costs, net (1.1) 0.5 Adjusted PBT % Tax (3.3) (2.3) Adjusted PAT % Adjusted EBITDA % Share Based Payments (1.6) (1.4) Non Recurring Costs (1.0) 0.0 Reported EBITDA % Adjusted Basic EPS (cents) % Adjusted EBITDA grew by 24% (26% on a constant currency basis) S&D cost increase is driven by the 41% increase in site numbers in addition to the impact of statutory wage increases Increase in admin. expenses driven by business growth and further investment in management capacity Increase in rent is partially driven by the Brandi acquisition of 42 leasehold sites in October 2017 Adjusted PBT growth impacted by prior year finance costs which include a gain of 1.7m on the retranslation of Sterling denominated debt Non recurring costs are the net costs arising from the acquisitions of the JFT, Brandi and Carsley Adjusted EPS growth impacted by higher number of shares now in issue following September placing 14

15 Revenue & Gross Profit Analysis FY 2017 m FY 2016 m Growth % L4L curr % Fuel Revenue 1, % 5.2% Food Revenue % 6.5% Store Revenue % 2.5% Total Revenue 1, , % 5.0% Fuel Gross Profit % 9.8% Food Gross Profit % 7.0% Store Gross Profit % 7.7% Total Gross Profit % 8.2% Non Fuel Total m m Growth % % Revenue % 3.9% Gross Profit % 7.4% Total gross profit grew 24.6% to 181.7m as a result of: - Continued investment in expanding the estate - Positive LFL performance - Stronger fuel margins driven primarily by the JFT acquisition ROI accounts for 66% of gross profit (FY %) and the UK accounts for 26% (FY %) The US has increased from 2% to 8% of total gross profit, primarily due to the Brandi acquisition LFL Performance Fuel: Gross profit increased by 9.8% on a constant currency basis due to the enhanced contribution from the JFT acquisition and a stronger fuel margin environment in the earlier part of the year Food: Revenue increased by 6.5% at constant currency reflecting continuing focus on our food to go offer and ongoing investment in these facilities 15 Store: The performance reflects strong LFL growth in ROI with enhanced margins from more attractive supplier terms combined with improvement in product mix

16 Applegreen plc 2017 Preliminary Results Presentation 16 Geographical Gross Profit Mix Gross Profit Mix- ROI m m m % % % 37% % 33% 0.0 FY 2016 FY 2017 Gross Profit Mix- UK Store Food Fuel ROI: Incremental margin from the JFT acquisition has increased the relative contribution of fuel to gross profit in the year UK: continued improvement in the gross profit contribution from food US: non-fuel now accounts for 52% of gross profit due to the Brandi acquisition Gross Profit Mix- US m m 39.5m 30% 31% 23% 22% 47% 47% FY 2016 FY 2017 Store Food Fuel m m 34% 66% 14.0m 27% 25% 48% FY 2016 FY 2017 Store Food Fuel

17 Gross Profit: Fuel m IRL UK US FY 2016 FY 2017 ROI fuel gross profit increased by 21% with LFL growth at 13.5% with the JFT as the primary driver Majority of growth in the UK was driven by new site openings with LFL fuel growing by 4.1% on a constant currency basis EV Charging, Birdhill M.S.A. Hydrogen Fuelling, Hempstead L.I. 17 Both ROI and UK experienced stronger fuel margins in the early part of the year which reflected favourable commodity price movements in H Growth in the US driven by Brandi acquisition Embracing alternative fuelling opportunities

18 18 FY 2017 Cashflow Summary FY 2017 m FY 2016 m Profit Before Tax Non - cash Adjustments Working Capital Movement Taxes Paid (1.6) (1.4) Cash flows from Operating Activities Capital Expenditure (113.4) (61.7) Proceeds from Share Issue Dividends Paid (1.5) 0.0 Long-Term Borrowings 21.3 (3.3) Net Finance Leasing (0.8) (1.0) Net Interest Paid (1.4) (1.7) Cash Flows from Financing Activities 66.7 (5.1) Very strong cash conversion of 201.6%. Favourable improvement in working capital position due to fuel volume growth and improved credit terms Proceeds from share issue relates primarily to the share placing which was completed in October 2017 Net increase in cash and cash equivalents 30.9 (19.2) Opening Cash & Cash Equivalents Exchange Losses (1.1) (0.3) Closing Cash & Cash Equivalents Cash Conversion 201.6% 152.5% Net Debt (1) Cash Conversion is calculated using Adjusted EBITDA and working capital movement, Adjusted EBITDA refers to normalised trading EBITDA, being EBITDA adjusted for share based payments & non-recurring items. Working capital movement is the variance between opening and closing debtors, creditors and stock adjusted for fixed asset accruals

19 19 FY 2017 Balance Sheet Summary 31-Dec-17 m 31-Dec-16 m Non-Current Assets Current Assets Current Liabilities (175.1) (131.4) Working Capital (118.0) (81.2) Cash and Cash Equivalents Total Debt (67.7) (48.8) Net Debt (10.2) (19.4) Non Current Liabilities (13.4) (10.8) Net Assets Share Capital & Share Premium Capital Reserves (63.7) (63.7) Retained Earnings Equity Net leverage of 0.3x at 31 December 2017 (31 December 2016: 0.6x) Capital Expenditure Analysis 2017 m 2016 m 2015 m Service Areas PFS Rebrands Dealer USA Development sites JFT Other Total Return on Capital Employed (1) 15.8% 17.5% Adjusted Return on Capital Employed (1) (2) 18.0% 20.9% (1) Return on Capital Employed based on adjusted EBIT (Earnings Before Interest and Taxation) (2) Return on Capital Employed adjusted for impact of assets under construction and development assets held at year end

20 OUTLOOK CGI of S.A. NAVAN, IRELAND

21 Outlook 21 Good momentum evident across our group Continuing expansion of the estate since the year end: One new Service Area opened in ROI Seven new PFS in UK Three new PFS in US 2017 acquisitions are augmenting growth in 2018 Strong balance sheet leaves us well positioned for further expansion Strong pipeline of opportunities across our markets We are confident in the prospects for the company in 2018 as our underlying business continues to perform well and we further evolve our growth strategy. The significant acquisitions completed in 2017 are performing as expected and we are well placed to progress both our organic and acquisition led development plans in the coming year.

22 APPENDICES

23 23 Site Categories Service Area Sites Motorway Service Areas ( MSA ) MSA s are located on motorways with large facilities, extensive parking and at least three food offers MSA s offer an own brand food and beverage offer (Bakewell) and a range of internationally recognised food brands Typically brown / green field developments Trunk Road Service Areas ( TRSA ) TRSA s are mid-size sites on trunk roads with seating areas and one to three food and beverage offerings High end stores with attractive ambiance Typically brown / green field developments Petrol Filling Stations ( PFS ) Company Owned Traditional forecourt, store offer and food to go either own brand or Subway / Costa Coffee Relevant retail proposition built to reflect local demographic Value offer in store built on own brand and promotion Ongoing rebrand / facility development opportunities Dealer PFS owned by operator, 5 year fuel supply agreements Fixed margin per litre to dealer

24 Applegreen Culture Low Fuel Prices, Always price promise Better Value Always in store Food and beverage offering is high quality Entrepreneurial culture Giving back embedded in company culture Charitable fund over 2m raised since 2009

25 Irish Retail Supply Chain Greater control and flexibility for retail propostition 25 Distribution Centre 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 110 stock keeping units Ambient - water and motor accessories Chilled - milk, meat and dairy products Food to go - sandwiches and salads Enables delivery of value to consumer and enhanced margin for company

26 2017 Corporate Activity- ROI and UK 26 Joint Fuel Terminal- Dublin Port One of three fuel importation facilities located in Dublin Port Cash consideration of 15.7m for 50% co-ownership Formerly Esso owned with storage capacity of 60,000 tonnes on 20 acres Terminal operated under a joint agreement with Valero Valero manage the facility Provides security of supply of retail fuels to our Irish business 75% through Dublin Facilitates improved buying capability with option to buy direct from refineriesansaction completed in July 2017 Carsley Group Network of six service areas and one petrol filling station in the UK Predominantly located on or near the A1 Very high volume traffic locations with significant food to go potential Under fuel tie with BP until 2020 Cash consideration of 21m Important milestone in the roll out of our service area development strategy in Great Britain Transaction completed in October 2017 and sites rebranded as Applegreen Currently exploring options to maximize potential of sites

27 2017 Corporate Activity - USA 27 Brandi Group Group located in a tight geographical area in and around Columbia, the state capital of South Carolina 42 retail sites with 34 petrol filling stations and eight stand-alone Burger King restaurants. 11 of the PFS sites also have Burger King restaurants co-located on the sites Other food to go offers include six Blimpies, five Subways and five Picalillys Fuel forecourts currently branded under Shell, Exxon-Mobil and Sunoco contracts Business is very well established in the market with a back-office support structure in place Existing management resources have been supplemented by Applegreen team Potential to enhance the existing retail offer Consideration of $5.7m (excluding inventory acquired) with Getty Realty Corporation, an established property investor in the US market, acquiring certain property assets for $68.3m Applegreen simultaneously entered into a long term agreement with Getty Realty to lease those assets Completed in October 2017

28 Applegreen estate: Ireland locations 28 MSA / TRSA PFS Dealer

29 Applegreen estate: UK locations 29 MSA / TRSA PFS

30 CA OR WA NV ID AZ UT MT WY NM CO ND SD NE TX KS OK MN IA MO AR LA WI IL MS IN TN AL MI KY OH GA WV SC FL PA VA NC DC NY NJ VT NH CT MA ME Applegreen plc 2017 Preliminary Results Presentation 30 Applegreen estate: US North East locations NEW HAMPSHIRE MASSACHUSETTS PFS NEW YORK CONNECTICUT RHODE ISLAND

31 CA OR WA NV ID AZ UT MT WY NM CO ND SD NE TX KS OK MN IA MO AR LA WI IL MS IN TN AL MI KY OH GA WV SC FL ME VT NH NY MA CT PA NJ DC VA NC Applegreen plc 2017 Preliminary Results Presentation 31 Applegreen estate: US South East locations SOUTH CAROLINA PFS

32 Management 32 Bob Etchingham Chief Executive Officer Founded the business in years in fuel industry Strategic vision on Applegreen s position in the forecourt sector Led aggressive growth in footprint capitalising on opportunities presented by the downturn Board Members Joe Barrett Chief Operating Officer Joined the business in its 2nd year of operation Background in retail and FMCG Key responsibility for management and development of retail proposition Delivered strong partnerships with international food brands Niall Dolan Chief Financial Officer Joined Applegreen 2015 as Head of Corporate Finance and Treasury Appointed Chief Financial Officer for the Group on 1st July 2017 Prior to joining Applegreen he was CFO of ISS Ireland Limited for five years having previously held a senior finance role with One51 plc Eugene Moore Developments Director 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 opened MSAs and TRSAs John Diviney Managing Director UK Joined Applegreen in 2013 as Head of Corporate Finance and Treasury and was appointed Director of Food Systems and Trading in 2015 Moved to the UK in 2016 to lead the ongoing expansion of UK operations Previously held senior roles with the Royal College of Surgeons in Ireland and the Sherry FitzGerald Group Danny Kitchen Independent Non-Executive Chairman 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 Howard Millar Independent Non-Executive Director 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) Martin Southgate Independent Non-Executive Director 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 global general management experience Brian Geraghty Independent Non-Executive Director Senior partner in Crowe Horwath, 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)