2017 Preliminary Results Presentation 13 th March 2018 Applegreen - - PowerPoint PPT Presentation

13 th March 2018

2017 Preliminary Results Presentation

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 verifjed 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, offjcers 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, offjcers 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

• therwise arising in connection therewith.

Certain information contained herein may constitute “forward-looking statements” which can be identifjed 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 refmected 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 fmuctuations, changes in its business strategy, political and economic uncertainty and other factors.

Disclaimer

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Applegreen plc 2017 Preliminary Results Presentation

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

Agenda

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Applegreen plc 2017 Preliminary Results Presentation

S.A. GOREY, IRELAND

BK, Subway, Bakewell, Lavazza

Highlights

• 2017 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 Q4 2017 and are trading in line with expectations
• Strong Fuel performance with favourable margin environment in H1 and attractive returns from JFT investment in

H2

Highlights

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Applegreen plc 2017 Preliminary Results Presentation

Distinctive convenience retail offering in the forecourt sector

“Low Fuel Prices, Always”

• Local price promise

Food and beverage focus

• 260 food outlets across the

estate

• Mix of own and international

brands

• Tailored offer to each location

“Better Value Always”

• Tailored retail offer
• Impulse/ ultra-convenience focus

Number of Food Offers at 31 December 2017 (260 total)

1 2 3

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Applegreen plc 2017 Preliminary Results Presentation

S.A. GOREY, IRELAND

Republic of Ireland

€9.1m €15.4m €10.7m €12.9m €6.9m €12.0m €0.0 €5.0 €10.0 €15.0 €20.0 €25.0 2015 2016 2017 €22.3m €22.0m €22.7m

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%
• f ROI fuel volumes in FY 2017

88% of the ROI estate is now branded Applegreen (2016: 85%)

RoI Cap Ex RoI Site Numbers

Republic of Ireland

PFS - Company Owned PFS - Dealer Owned SA

77 80 87 33 48 60 23 27 30 50 100 150 200 Dec-15 Dec-16 Dec-17 177 155 133

PFS SA

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Applegreen plc 2017 Preliminary Results Presentation

SPALDING LINCOLNSHIRE

Greggs, Subway and Costa Cafe

U.K.

€8.6m €13.0m €37.0m €13.5m €13.0m €7.4m €0.0 €5.0 €10.0 €15.0 €20.0 €25.0 €30.0 €35.0 €40.0 €45.0 €50.0 2015 2016 2017

Capital Expenditure

€26.0m €22.1m €44.4m 60 71 86 2 6 11 20 40 60 80 100 120 Dec-15 Dec-16 Dec-17 97 77 62

UK Site Numbers UK Cap Ex 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

• perational 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

51% of the UK estate now branded Applegreen (2016: 39%)

UK

PFS - Company Owned SA PFS - Company Owned SA

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Applegreen plc 2017 Preliminary Results Presentation

HEMPSTEAD L.I.

USA

5 11 68 10 20 30 40 50 60 70 80 Dec-15 Dec-16 Dec-17 68 11 5

USA

North East

• 26 sites now trading – acquired through single site
• pportunities or strategic partnership with CrossAmerica

Partners

• Significant fuel focus with strong margins particularly in

H2 2017

• 7-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

€2.1m €1.0m €10.5m €0.0 €2.0 €4.0 €6.0 €8.0 €10.0 €12.0 2015 2016 2017

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Applegreen plc 2017 Preliminary Results Presentation

FINANCIAL REVIEW

Profit and Loss Account

FY 2017 €m FY 2016 ¤m %Var

Revenue 1,428.1 1,177.6 21.3% Gross Profjt 181.7 145.8 24.6% Selling & Distribution Costs (100.1) (80.4) 24.5% Administrative Expenses (25.8) (20.8) 24.0% Other income 2.2 1.2 Adjusted EBITDAR 58.0 45.8 26.6% Rent (18.2) (13.8) Adjusted EBITDA 39.8 32.0 24.4% Depreciation & Amortisation (14.1) (11.1) Impairment 0.0 (0.4) Finance Costs, net (1.1) 0.5 Adjusted PBT 24.6 21.0 17.1% Tax (3.3) (2.3) Adjusted PAT 21.3 18.7 13.9% Adjusted EBITDA 39.8 32.0 24.4% Share Based Payments (1.6) (1.4) Non Recurring Costs (1.0) 0.0 Reported EBITDA 37.2 30.6 21.6% Adjusted Basic EPS (cents) 25.65 23.32 10.0%

• 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

• n 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

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Applegreen plc 2017 Preliminary Results Presentation

• 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 2016 71%)

and the UK accounts for 26% (FY 2016 27%)

• 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

• ngoing investment in these facilities
• Store: The performance reflects strong LFL growth in

ROI with enhanced margins from more attractive supplier terms combined with improvement in product mix

Revenue & Gross Profit Analysis

FY 2017 ¤m FY 2016 ¤m Growth % L4L Growth @const curr % Fuel Revenue 1,145.1 937.6 22.1% 5.2% Food Revenue 103.7 85.2 21.7% 6.5% Store Revenue 179.3 154.9 15.8% 2.5% Total Revenue 1,428.1 1,177.7 21.3% 5.0% Fuel Gross Profjt 68.1 53.0 28.5% 9.8% Food Gross Profjt 59.2 48.1 23.1% 7.0% Store Gross Profjt 54.4 44.7 21.7% 7.7% Total Gross Profjt 181.7 145.8 24.6% 8.2% Non Fuel Total €m €m Growth % % Revenue 283.0 240.1 17.9% 3.9% Gross Profjt 113.6 92.8 22.4% 7.4%

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Applegreen plc 2017 Preliminary Results Presentation

66% 48% ​ 25% 34% 27%

• 2.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0

FY 2016 FY 2017

Store Food Fuel €14.0m €2.9m 31% 33% 38% 37% 31% 30% 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0

FY 2016 FY 2017

Store Food Fuel €103.4m €120.4m

Geographical Gross Profit Mix

Gross Profit Mix- ROI Gross Profit Mix- US

• 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- UK

¤’m ¤’m ¤’m

47% 47% 22% 23% 31% 30%

• 5.0

10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0

FY 2016 FY 2017

Store Food Fuel €47.3m €39.5m

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Applegreen plc 2017 Preliminary Results Presentation

• 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

• Both ROI and UK experienced stronger fuel

margins in the early part of the year which reflected favourable commodity price movements in H1 2017

• Growth in the US driven by Brandi acquisition
• Embracing alternative fuelling opportunities

Gross Profit: Fuel

32.4 18.7 1.9 39.2 22.2 6.7 10 20 30 40 50 IRL UK US

FY 2016 FY 2017

¤’m

EV Charging, Birdhill M.S.A. Hydrogen Fuelling, Hempstead L.I.

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Applegreen plc 2017 Preliminary Results Presentation

FY 2017 ¤m FY 2016 ¤m

Profjt Before Tax 22.0 19.5 Non - cash Adjustments 16.8 12.7 Working Capital Movement 40.4 16.8 Taxes Paid (1.6) (1.4) Cash fmows from Operating Activities 77.6 47.6 Capital Expenditure (113.4) (61.7) Proceeds from Share Issue 49.1 0.9 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) Net increase in cash and cash equivalents 30.9 (19.2) Opening Cash & Cash Equivalents 27.7 47.2 Exchange Losses (1.1) (0.3) Closing Cash & Cash Equivalents 57.5 27.7 Cash Conversion 201.6% 152.5% Net Debt 10.2 19.4

FY 2017 Cashflow Summary

(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 fjxed asset accruals

• 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

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Applegreen plc 2017 Preliminary Results Presentation

31-Dec-17 ¤m 31-Dec-16 ¤m

Non-Current Assets 322.9 226.5 Current Assets 57.1 50.2 Current Liabilities (175.1) (131.4) Working Capital (118.0) (81.2) Cash and Cash Equivalents 57.5 29.4 Total Debt (67.7) (48.8) Net Debt (10.2) (19.4) Non Current Liabilities (13.4) (10.8) Net Assets 181.3 115.1 Share Capital & Share Premium 191.4 141.1 Capital Reserves (63.7) (63.7) Retained Earnings 53.6 37.7 Equity 181.3 115.1 Return on Capital Employed (1) 15.8% 17.5% Adjusted Return on Capital Employed (1) (2) 18.0% 20.9%

2017 ¤m 2016 ¤m 2015 ¤m

Service Areas 19.4 19.8 26.4 PFS 43.8 18.3 8.8 Rebrands 3.1 8.7 7.0 Dealer 0.7 1.4 2.0 USA 10.5 1.0 2.1 Development sites 7.2 1.7 5.8 JFT 16.2 0.0 0.0 Other 12.1 9.4 6.7 Total 113.0 60.3 58.8

FY 2017 Balance Sheet Summary

Capital Expenditure Analysis

• Net leverage of 0.3x at 31 December

2017 (31 December 2016: 0.6x)

(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

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Applegreen plc 2017 Preliminary Results Presentation

CGI of S.A. NAVAN, IRELAND

OUTLOOK

Outlook

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.

• 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

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Applegreen plc 2017 Preliminary Results Presentation

APPENDICES

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

• ffers
• MSA’s offer an own brand food and beverage
• ffer (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

• fferings
• 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
• pportunities

Dealer

• PFS owned by operator, 5 year fuel supply

agreements

• Fixed margin per litre to dealer

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Applegreen plc 2017 Preliminary Results Presentation

Applegreen Culture

“Low Fuel Prices, Always” price promise

1 2 3 4 5

Food and beverage

• ffering is high quality

Entrepreneurial culture “Better Value Always” in store ‘Giving back’ embedded in company culture Charitable fund – over €2m raised since 2009

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Applegreen plc 2017 Preliminary Results Presentation

Irish Retail Supply Chain

Greater control and flexibility for retail propostition

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

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Applegreen plc 2017 Preliminary Results Presentation

2017 Corporate Activity- ROI and UK

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

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Applegreen plc 2017 Preliminary Results Presentation

2017 Corporate Activity - USA

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

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Applegreen plc 2017 Preliminary Results Presentation

MSA / TRSA PFS Dealer

Applegreen estate: Ireland locations

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Applegreen plc 2017 Preliminary Results Presentation

Applegreen estate: UK locations

MSA / TRSA PFS

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Applegreen plc 2017 Preliminary Results Presentation

Applegreen estate: US North East locations

PFS

NEW YORK RHODE ISLAND CONNECTICUT MASSACHUSETTS NEW HAMPSHIRE

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Applegreen plc 2017 Preliminary Results Presentation

Applegreen estate: US South East locations

PFS

SOUTH CAROLINA

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Applegreen plc 2017 Preliminary Results Presentation

Management Board Members

Bob Etchingham Chief Executive Officer

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 on opportunities presented by the downturn

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

• f Green Property plc and

Government appointed chairman of Irish Nationwide Building Society

Joe Barrett Chief Operating Officer

Joined the business in its 2nd year

• f operation

Background in retail and FMCG Key responsibility for management and development of retail proposition Delivered strong partnerships with international food brands

Howard Millar Independent Non-Executive Director

Deputy Chief Executive and CFO

• f Ryanair until he stepped down

from that post in December 2014 Non executive director of Ryanair as well as Irelandia (Ryan family investment company)

Niall Dolan Chief Financial Officer

Joined Applegreen 2015 as Head

• f 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

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

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

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)

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

• perations

Previously held senior roles with the Royal College of Surgeons in Ireland and the Sherry FitzGerald Group

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Applegreen plc 2017 Preliminary Results Presentation