Applegreen plc 2016 Preliminary Results Presentation 14 th March - - PowerPoint PPT Presentation

2016 Preliminary Results Presentation

14th March 2017

Applegreen plc

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 otherwise 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.

Applegreen plc

Disclaimer

2016 Preliminary Results Presentation | Page 2

Applegreen plc

Agenda

• 1. Introduction & Highlights
• 2. Estate Growth and Development
• 3. Financial Review
• 4. Outlook
• 5. Appendices
• 6. Q & A

2016 Preliminary Results Presentation | Page 3

• 1. Introduction & Highlights

2016 Preliminary Results Presentation | Page 4

(1) EBITDA is defjned as earnings before interest, tax, depreciation, amortisation and impairment charges. Adjusted EBITDA refers to normalised trading EBITDA, being EBITDA adjusted for share based payments & non-recurring items

Applegreen plc

Highlights

2016 Preliminary Results Presentation | Page 5

• 16% increase in gross profit on 2015 (20% in constant currency)
• Adjusted EBITDA increased 11% from €28.9m in 2015 to €32.0m in 2016 (14.5% constant currency).
• Key factors:

○ Continued expansion of the estate ○ Strong LFL store performance in Ireland ○ Growth in food across Ireland and UK

• Estate expanded to 243 sites at 31 December 2016 with capex of €60.3m in 2016 (2015 €58.8m)
• Maiden dividend of 1.25c per share
• Announced the proposed acquisition of 50% of the Joint Fuels Terminal in Dublin port, scheduled to complete Q2
• New franchise relationships developed with Freshii and 7-Eleven and a new Costa Café concept introduced to the UK
• market. 32 new food outlets opened
• Net debt position at 31 December 2016 of €19m

€32.0m €23.0m €28.9m

• Adj. EBITDA Growth

2014 2015 2016 18% CAGR 26% CAGR Dec-14 Dec-15 Dec-16 70 54 18 8 152 200 243 60 25 33 5 71 33 48 11 77 80

Site Growth

ROI PFS UK PFS Service Areas Dealer USA

5 10 15 20 25 30 35 50 100 200 250 150

Applegreen plc

Distinctive convenience retail offering in the forecourt sector

2016 Preliminary Results Presentation | Page 6

Number of Food Offers at 31 December 2016

• Mix of own and international

brands

• Tailored offer by location
• Local price promise
• Tailored retail offer
• Impulse/ ultra-convenience

focus

“Low Fuel Prices Always” “Better Value Always” Food and beverage focus

1 2 3

2 78 16 12 6 57 8 4

• 2. Estate Growth and Development

2016 Preliminary Results Presentation | Page 7

MSA TRSA PFS

Site Categories

Service Area Sites Motorway Service Areas (“MSA”)

• MSA’s are located on motorways with large facilities and

extensive parking and at least three food offers

• MSA’s offer an own brand food and beverage offer

(Bakewell & aCafé) and a range of internationally recognised food brands - Burger King, Subway, Costa Coffee, Greggs, Lavazza, Chopstix and Freshii

• 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 / Subway

• 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

Applegreen plc 2016 Preliminary Results Presentation | Page 8

• 27 service areas in ROI including 9 MSA’s, 6 under 25 year

licence from Transport Infrastructure Ireland (“TII”)

• Four new TRSAs opened in ROI during 2016
• One new TRSA opened in February 2017
• Two new TRSAs to commence construction shortly (including one

redevelopment of an existing PFS) will open Q3 2017

• Strong pipeline of TRSAs in planning process

Republic of Ireland: Service Areas

Applegreen plc

Dec-15 23 27 Dec-16 Dec-14 9 9 18 8 10 14 18

TRSA MSA

Site Growth

2016 Preliminary Results Presentation | Page 9

¤12.9m ¤6.9m ¤18.5m

Cap Ex

2014 2015 2016

Birdhill MSA ¤0.0 ¤2.0 ¤4.0 ¤6.0 ¤8.0 ¤10.0 ¤12.0 ¤14.0 ¤16.0 ¤18.0 ¤20.0 5 10 15 20 25 30

Petrol Filling Stations- company owned

• Five new PFS sites in ROI in 2016, one existing PFS upgraded to

a TRSA

• 70% of company owned estate in ROI now branded Applegreen
• 11 rebrands / upgrades completed during 2016
• One new PFS opened in 2017 and three additional PFS sites

subject to CCPC approval

• Healthy pipeline for 2017

Petrol Filling Stations - dealer owned

• 15 new dealer sites opened in 2016 with four additional sites
• pened since year end
• Dealer now accounts for 16% of ROI volumes

Fuelcard

• Now accounts for 7% of ROI fuel volumes
• Positive and growing earnings
• Extended to UK during 2016

Republic of Ireland: PFS, Dealer and Fuelcard

Applegreen plc 2016 Preliminary Results Presentation | Page 10

Site Growth Cap Ex

2014 2015 2016 ¤9.1m ¤15.4m ¤5.2m ¤2.3m ¤3.0m ¤9.8m ¤4.1m ¤4.2m ¤1.4m ¤2.0m ¤2.4m ¤0.5m

New sites Rebrands Dealer Applegreen Unbranded Dealer

Dec-15 128 110 Dec-16 Dec-14 78 30 8 40 56 50 24 27 48 33

20 40 60 80 100 120 140 ¤0.0 ¤2.0 ¤4.0 ¤6.0 ¤8.0 ¤10.0 ¤12.0 ¤14.0 ¤16.0

Service Areas

• Six service areas in UK including two MSAs both in Northern

Ireland

• Award winning Lisburn site opened in March 2016 on M1

Southbound in Northern Ireland

• Three TRSA sites opened in 2016 including two upgraded from

PFS sites

• Further MSA opened in Northern Ireland in February 2017 on M1

Northbound

• Good development of pipeline of both MSAs and TRSAs

UK: Service Areas

Applegreen plc 2016 Preliminary Results Presentation | Page 11

○ Additional PFS upgraded to TRSA in February 2017 ○ Construction commenced on two TRSAs to open by Q3

• 2017. Further sites in planning process

○ Several potential MSA sites in the early stages of planning process Cap Ex and Year End Site Numbers

Lisburn Southbound MSA Slade End TRSA

2 ¤6.5m ¤13.5m ¤13.1m 6

Capex- UK SA Capex- UK SA

2014 2015 2016

¤0.0 ¤5.0 ¤10.0 ¤15.0 1 2 3 4 5 6 7

Petrol Filling Stations- Company Owned

• 13 new PFS sites in UK in 2016 with a balanced mix of leasehold

and freehold sites

• Three new sites opened since 31 December 2016, good pipeline
• Seven rebrands/ upgrades completed during 2016 including two

upgraded to TRSAs

• 35% of the UK estate branded Applegreen at 31 December 2016

(up from 24% at IPO)

• Rebrand/ upgrade programme ongoing

UK: PFS

Applegreen plc 2016 Preliminary Results Presentation | Page 12

Applegreen Unbranded

Dec-15 71 60 Dec-16 Dec-14 54 44 10 24 17 47 43

Site Growth Cap Ex

2014 2015 2016 ¤8.6m ¤13.0m ¤7.1m ¤3.2m ¤3.8m ¤5.8m ¤8.5m ¤2.8m ¤4.5m

New sites Rebrands

Ipswich PFS ¤0.0 ¤2.0 ¤4.0 ¤6.0 ¤8.0 ¤10.0 ¤12.0 ¤14.0 10 20 30 40 50 60 70 80

Petrol Filling Stations

• US operations now trading for 2.5 years; profitable in 2016
• Master lease signed with CrossAmerica Partners in Q3 for New

England sites

USA

Applegreen plc 2016 Preliminary Results Presentation | Page 13 Hempstead PFS

Cap Ex and Year End Site Numbers

2 5 ¤0.5m ¤2.1m ¤1m 11

Capex- USA Site numbers- USA

2014 2015 2016

• Five of these taken over in Q4 adding to 6 in Long Island (“LI”)
• Franchise relationship signed with 7-Eleven; Hempstead, LI

now trading as 7-Eleven

• Two sites added since year end including first potential TRSA
• Actively exploring other opportunities
• Strengthening management team
• Management confident that USA is a viable market for expansion
• Ample supply of leasehold expansion opportunities for

corporate operator

¤0.0 ¤0.5 ¤2.5 ¤2.0 ¤1.5 ¤1.0 2 4 6 8 10 12

Awards reflecting strong industry recognition

Applegreen plc

Retail Excellence Ireland Best Forecourt of the Year 2016 Wicklow Service Area NACS Convenience Retailer of the Year Award M1 Lisburn Service Area Irelands Forecourt and Convenience Awards Green Store of the Year Mountgorry Northern Ireland’s Neighbourhood Retailer Awards Forecourt of the Year Ballymena

2016 Preliminary Results Presentation | Page 14

• 3. Financial Review

2016 Preliminary Results Presentation | Page 15

Applegreen plc

Profit and Loss Account: 2016 Results

2016 ¤m 2015 ¤m %Var

Revenue 1,177.6 1,081.5 8.9% Gross Profjt 145.8 125.9 15.8% Selling & Distribution Costs (93.8) (78.5) Administrative Expenses (21.2) (19.5) Other income 1.2 1.0 Adjusted EBITDA 32.0 28.9 10.7% Depreciation & Amortisation (11.2) (8.7) Impairment (0.4) 0.0 Finance Costs, net 0.5 (2.5) Adjusted PBT 20.9 17.7 18.1% Tax (2.3) (2.1) Adjusted PAT 18.6 15.6 19.2% Adjusted EBITDA 32.0 28.9 10.7% Share Based Payments (1.4) (2.7) Non-recurring charges 0.0 (1.1) Reported EBITDA 30.6 25.1 21.9% Adjusted EPS (cents) 23.32 22.25 Dividends per Share (cent) 1.25

• 16% growth in gross profit leading to

11% growth in adjusted EBITDA (14% at constant currency)

• Growth in S&D mainly reflects growth in

scale of business

• Finance costs a positive number due to FX

gain on Sterling loan

• Increase in admin reflects in particular

growth in development costs and increased resource in UK

2016 Preliminary Results Presentation | Page 16

• Total gross profit of €145.8m reflecting

growth of 15.8% from prior year

• Strong growth in food and store sales

at 18.8% with LFL growth (at constant currency) of 7.1% which is reflected in the gross profit growth numbers

• Food GP % impacted by scheduled

increase in % charged by Irish Transport authority on revenues in their six MSA

• sites. Excluding that, LFL constant

currency increase in food GP was 13.1%

• Store revenue growth reflects strong LFL

growth in ROI

• Fuel gross profit decreased by 3.3% on

a LFL constant currency basis reflecting impact of rising prices throughout the period and higher fuel card mix in Ireland

Applegreen plc

Revenue and Gross Profit Analysis

Dec 16 ¤m Dec 15 ¤m Growth % L4L Growth @ const curr % Fuel Revenue 937.5 879.3 6.6% (5.2%) Food Revenue 85.2 67.5 26.2% 12.4% Store Revenue 154.9 134.7 15.0% 4.5% Total Revenue 1,177.6 1,081.5 8.9% (2.9%) Fuel Gross Profjt 53.0 49.0 8.2% (3.3%) Food Gross Profjt 48.1 37.9 26.9% 9.6% Store Gross Profjt 44.7 39.0 14.6% 8.3% Total Gross Profjt 145.8 125.9 15.8% 4.2% Non Fuel Total ¤m ¤m Growth % % Revenue 240.1 202.2 18.8% 7.1% Gross Profjt 92.8 76.9 20.7% 8.9%

2016 Preliminary Results Presentation | Page 17

Applegreen plc

Geographical Revenue and Gross Profit Mix

2016 Revenue and Gross Profjt by geography

Ireland UK US

Gross Profjt Mix- ROI Gross Profjt Mix- UK

Fuel Food Store Fuel Food Store

2016 Preliminary Results Presentation | Page 18

• UK as a region accounts for 27% of total gross

margin for the period

• Continued evolution of mix of gross profit
• Food accounts for 33% of gross profit

○ 38% in ROI up from 36% in 2015 ○ 22% in the UK compared to 16% in 2015

Gross Profit Revenue

2% 2% 71% 59% 27% 39%

20 40 60 80 100

2016 2015

38% 31% ¤103.3m 36% 31% ¤89.9m 33% 31%

20 40 60 80 100 120

2016 2015

16% 22% 32% 31% ¤34.7m ¤39.5m 52% 47%

5 10 15 20 25 30 35 40 45

2016 Preliminary Results Presentation | Page 19

• Continued rising oil prices created difficult

backdrop for margins during the year

• In Ireland this was compounded by the mix of

sales with a higher volume of fuel card

• Competitive environment has remained the same

in the UK while in Ireland main players have continued to upgrade their offer

Applegreen plc

Gross Profit: Fuel

Gross Profjt Growth % L4L Growth @ const curr %

Ireland 8.0% (4.8%) UK 3.3% (0.6%) Total Gross Profjt 8.2% (3.3%)

Fuel Gross Profjt

2016 2015

¤32.4m ¤30.0m ¤18.1m ¤18.7m UK IRL

5 10 20 25 30 35

2016 ¤m 2015 ¤m

Profjt Before Tax 19.5 13.9 Non- cash Adjustments 12.7 14.2 Working Capital Movement 16.8 8.5 Taxes Paid (1.4) (2.9) Cash fmows from Operating Activities 47.6 33.7 Capital Expenditure (61.7) (54.8) Proceeds from the issue of Shares 0.9 67.5 Capital Contributions/ Option Proceeds 0.0 0.5 Long-Term Borrowings (3.3) (7.0) Net Finance Leasing (1.0) (1.3) Net Interest Paid (1.7) (2.1) Redemption of Share Capital 0.0 (1.9) Cash Flows from Financing Activities (5.1) 55.7 Net increase in cash and cash equivalents (19.2) 34.6 Opening Cash & Cash Equivalents 47.2 12.3 Exchange Gains/(losses) (0.3) 0.3 Closing Cash & Cash Equivalents 27.7 47.2 Cash Conversion(1) 153% 129%

Applegreen plc

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.

• Strong cash conversion figure, increase
• n 2015 driven by rise in fuel price
• Growth in negative working capital reflects

volume growth driven by expansion

2016 Preliminary Results Presentation | Page 20

31-Dec-16 ¤m 31-Dec-15 ¤m

Non-Current Assets 226.5 187.1 Current Assets 50.2 39.5 Current Liabilities 131.4 113.3 Working Capital (81.2) (73.8) Cash and Cash Equivalents 29.4 49.3 Total Debt 48.8 54.0 Non Current Liabilities 10.8 10.3 Net Assets 115.1 98.3 Share Capital & Share Premium 146.5 143.3 Capital Reserves (69.1) (65.4) Retained Earinings 37.7 20.4 Equity 115.1 98.3 Return on Capital Employed 18% 24%

2016 ¤m 2015 ¤m 2014 ¤m

Service Areas 19.8 26.4 25.0 PFS 18.3 8.8 6.2 Rebrands 8.7 7.0 5.6 Dealer 1.4 2.0 0.5 USA 1.0 2.1 0.5 Development sites 1.7 5.8 0.5 Other 9.4 6.7 9.8 Total 60.3 58.8 48.1

Applegreen plc

Balance Sheet Summary

• Net debt position of €19.4m at 31

December 2016

• Reduction in ROCE reflects capex

in recent years focused on larger infrastructure projects Capital Expenditure Analysis

2016 Preliminary Results Presentation | Page 21

• 4. Outlook

2016 Preliminary Results Presentation | Page 22

Upgrades / Rebrands 19 rebrands/upgrades completed in 2016 and a further four completed since 31 December including one TRSA conversion in the UK Programme ongoing Service Area development Six additional service areas in 2016 (two UK, four ROI) Three additional Service Areas trading since 31 December (one TRSA in ROI, one MSA and one TRSA in UK), further sites being developed A number of UK Service Areas in the planning process

1 2 3

Applegreen plc

PFS Network expansion 18 company owned sites added across ROI and UK in 2016 and 15 dealer sites Three further sites opened in the UK since 31 December and five in ROI (including four dealer sites), good pipeline for 2017 in both regions USA estate expanded by six during 2016 with two additional sites since period end

Outlook

2016 Preliminary Results Presentation | Page 23

We have a strong pipeline of further developments of both service areas and petrol filling stations across our markets. Non fuel sales remain strong in ROI in 2017 while fuel margin experience has been in line with 2016. Trading in the UK has also been positive and we remain confident on the prospects for the business for 2017.

• 5. Appendices

2016 Preliminary Results Presentation | Page 24

Applegreen plc

Applegreen Customer Proposition

“Low Fuel Prices Always” price promise “Better Value Always” in store Food and beverage

• ffering is high quality

Entrepreneurial Culture ‘Giving back’ embedded in company culture Charitable fund - circa ¤1m in 5 years

2016 Preliminary Results Presentation | Page 25

1 2 3 4 5

Applegreen plc

Food and Beverage

International brands complement Applegreen’s own offer

2016 Preliminary Results Presentation | Page 26

Applegreen plc

Irish Retail Supply chain

Greater control and fmexibility 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 – 106 stock keeping units

2016 Preliminary Results Presentation | Page 27

○ Ambient - water; motor accessories ○ Chilled milk; chilled foods ○ Sandwiches; Food to go

• Enables delivery of value to consumer and enhanced margin for

company

Applegreen plc

Applegreen estate: Ireland locations

2016 Preliminary Results Presentation | Page 28

MSA / TRSA PFS Dealer

Lifford Donegal Sligo Ballina Castlebar Tuam Roscommon Galway Ennis Limerick Killarney Cork Fermoy Clonmel Waterford Wexford Kilkenny Carlow Portlaoise Tullamore Mullingar Longford Trim Drogheda Dundalk Monnaghan Carrick on Shannon Naas Wicklow Dublin Westport Letterkenny Ashbourne Lusk Swords Celbridge Rathcoole Ballyfermot Knocklyon Dundrum Donaghmede Ballymun Dalkey Ballsbridge

Northhampton Norwich London Cardiff Nottingham Leeds Manchester Bristol Birmingham

Applegreen plc

Applegreen estate: UK locations

2016 Preliminary Results Presentation | Page 29

MSA / TRSA PFS

Applegreen plc

Applegreen estate: US Locations

2016 Preliminary Results Presentation | Page 30

Hartford Long Island New York Boston

RHODE ISLAND CONNECTICUT MASSACHUSETTS

Providence

PFS

Executive Directors Senior Management Non-Executive Directors

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

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

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)

Paul Lynch Chief Financial Officer

A chartered accountant with extensive corporate finance and management experience across a number of sectors Served as a Director of an Irish plc for 5 years Worked with Applegreen on the delivery of their refinance in 2013 and joined as Finance Director in July 2014

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 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 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)

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 Applegreen plc 2016 Preliminary Results Presentation | Page 31