Murphy USA Inc. (MUSA) November 2017 Investor Presentation Murphy USA Inc. 1
Cautionary Statement This presentation contains forward-looking statements. These statements, which express management’s current views concerning future events or results, are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, but are not limited to, the volatility and level of crude oil and gasoline prices, the pace and success of our expansion plan, our relationship with Walmart, political and regulatory uncertainty, uncontrollable natural hazards, adverse market conditions or tax consequences, among other things. For further discussion of risk factors, see “Risk Factors” in the Murphy USA registration statement on our latest form 10-K. Murphy USA undertakes no duty to publicly update or revise any forward-looking statements. The Murphy USA financial information in this presentation is derived from the audited and unaudited combined financial statements of Murphy USA, Inc. for the years ended December 31, 2016, 2015, 2014, 2013, and 2012. Please reference our latest 10-K, 10-Q, and 8-K filings for the latest information. This presentation also contains non-GAAP financial measures. We have provided a reconciliation of such non-GAAP financial measures to the most directly comparable measures prepared in accordance with U.S. GAAP in the Appendix to this presentation. Christian Pikul, CFA Director, Investor Relations Office: 870-875-7683 christian.pikul@murphyusa.com Murphy USA Inc. 2
Murphy USA continues its proven and differentiated strategy MUSA Relative Stock Performance • Murphy USA is uniquely positioned as a Indexed From Spinoff to November 24, 2017 low-cost fuel and convenience retailer Murphy USA Inc. • Our strategy to compete has five coherent S&P 500 Index 220 S&P 400 Midcap Index elements: – Grow Organically 200 200 – Diversify Merchandise Mix – Sustain Cost Leadership Position – Create Advantage from Market Volatility 180 – Invest for the Long-Term 166 160 • Our business model is resilient to, and takes 159 advantage of, volatile market conditions 140 • Our independent growth plan combines efficient unit-growth and shareholder-friendly 120 capital allocations • Murphy USA has a proven track record of 100 execution since our 2013 spin-off Spin Q3, 2013 Q4, 2013 Q1, 2014 Q2, 2014 Q3, 2014 Q4, 2014 Q1, 2015 Q2, 2015 Q3, 2015 Q4, 2015 Q1, 2016 Q2, 2016 Q3, 2016 Q4, 2016 Q1, 2017 Q2, 2017 Q3, 2017 Q4, 2017 • We have a very bright future ahead Murphy USA Inc. 3
MUSA creates value through a simple formula - and executes MUSA Value Creation Drivers 2016 Proof Point 2017 Proof Point 5% unit growth 3-4% unit growth (estimated) Organic • 67 new sites; 10 R&R • 45-50 new sites; 20 R&R • 300 refresh; 180 Super • 300 refresh; 246 super Growth Coolers coolers * 5% contribution growth 5.6% YTD contribution growth • +1.7% volume growth • (0.9)% volume growth Fuel • 15.4 cpg total margin • 16.3 cpg total margin Contribution • 3.8 cpg from PS&W/RINs • 2.2 cpg from PS&W/RINs + 1.6 cpg to 1.56 cpg YTD 2.5 cpg to 1.6 cpg • +30 bps merchandise • +120 bps merchandise Fuel EPS Growth • (0.8%) contribution $ • +11.2% contribution $ Breakeven • -3.9% site opex* APSM • -4.1% site opex* APSM EPS increased - SG&A per store up 3% SG&A per store down 10% 39% to $5.59 in • $6.1 million increase in • $6.6 million decline in 2016 Corporate total SG&A YTD total SG&A • Investing in people and Costs • Tax-efficient non-core capabilities asset sale / • 2.3M shares • 4.9M shares repurchased YTD repurchased Shares • 6.1% of shares out • 11% of shares out Outstanding *Site Opex excludes credit card fees **SG&A per-store excludes stock-based compensation Murphy USA Inc. 4
The competitive landscape continues to evolve Murphy USA QuikTrip Hypermarkets Big-Box C-Stores Supermarkets and mass Walmart Sheetz Large stores with merchants with comprehensive offerings small-box forecourts including food offer Kroger Wawa Strength: Low fuel prices Safeway and integrated loyalty Speedway Strength: Destination programs/ promotions tied for merchandise offer to in-store purchases Costco supported by low fuel prices Casey’s 784 Non-Supermarket C-Stores CST Susser (Stripes) QuikTrip Murphy USA • # 1 in Fresh Food • # 1 in Low Fuel Price The Pantry • #1 in Merchandise • #2 in Pump Speed Selection Couche-Tard Sunoco (Circle K) 7-Eleven The Consolidators: Consolidation Model 7-11 and Circle K Stand-alone public peer Franchises with distinctive C-store brand and capabilities • Middle of the road in all categories Strength: Store uplift from franchise and scale advantages that support acquisition premiums C-Store Study conducted by Market Force Information, published in Convenience Store News Murphy USA Inc. 5
Organic Growth Express growth, rebuilds continue in Independent Growth Plan Estimated Store Activity 2015 - 2019 74 77 Raze & Rebuild 70 70 70 1 10 New Stores 20 Up to 20 Up to 20 73 67 45 to 50 Up to 50 Up to 50 2015a 2016a 2017e 2018e 2019e Total Units 1,335 1,401 1,451 1,501 1,551 Express Growth 17 25 42 50 50 USA Growth 56 42 8 0 0 Raze & Rebuild 1 10 20 20 20 Murphy USA Inc. 6
Fuel Contribution Fuel margins reside within a historical range of 14 to 16 cpg MUSA Total Fuel Margin • We expect to earn 14 to 16 cpg in total fuel CPG contribution from our combined retail and 18.5 PS&W plus RIN sources 16.4 2.7 14 -16 • MUSA’s total fuel margin has come within or 15.4 16.0 14.9 14.4 above the expected range each of the last 5 3.4 14.0 1.5 2.4 3.8 fiscal years CPG • We revised 2017 margin guidance down from our expected annual range after Q1 - Adverse supply conditions pressured rack prices 12.5 12.9 13.0 15.8 11.6 - Political uncertainty caused RIN prices to decline without offsetting spot-to-rack adjustments - Weaker Q1 fuel demand and retail margins • We revised 2017 margin guidance higher on $515 $496 $491 $631 $486 2012 2013 2014 2015 2016 2017 Q3 conf call, suggesting higher-end of Guidance original guidance range of 14-16 cpg (Revised) - Robust retail margin environment from seasonal oil price declines and aftermath of hurricanes Product Supply & Wholesale + RINs LT expectations (low) - RIN’s back in equilibrium, spot -rack margins Retail LT expectations (high) closer to historical levels Murphy USA Inc. 7
Fuel Breakeven Volatility favors our low-cost business model Total Fuel and Breakeven Margin (cpg) 2013 – 2016 Fuel Breakeven Margin (cpg) PS&W plus RIN 22.7 25 Retail Margins 20.6 20.4 20 18.7 18.5 17.9 18.1 16.7 16.4 16.0 15.4 15.5 15.4 14.9 15 14.0 13.9 14.0 13.8 12.3 10.2 CPG 10 3.4 5 2.5 1.6 2.8 0 -5 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 FYE 2013 2014 2015 2016 2017 PS&W 3.4 2.7 2.4 3.8 5.5 7.2 1.2 -1.9 3.8 5.0 -0.2 1.5 2.9 5.9 1.8 4.8 0.0 1.5 5.1 2.0 + RIN Retail Margin 13.0 15.8 12.4 12.5 10.6 11.6 6.8 13.2 17.5 24.6 10.0 9.0 18.1 11.1 10.8 13.7 10.1 16.6 15.5 14.0 Murphy USA Inc. 8
Fuel Breakeven MUSA’s in -store metrics buck industry trends Cumulative Growth in Cumulative Growth in Industry Metrics (APSM) MUSA Metrics (APSM) 2014 - 2016 2014 - 2016 21.5% (6.3%) contraction 13.1% 15.2% 9.1% 7.0% 6.5% +16.3% Data Not expansion Available 2.5% 1.4% 0.9% 2014 2015 2016 -3.2% 2014 2015 2016 Merchandise Profit (Industry) Merchandise Profit (MUSA) Site Opex Excluding Payment Fees (Industry) Site Opex Excluding Payment Fees (MUSA) Murphy USA Inc. 9
Corporate Costs SG&A investments enhance capabilities and scalability • People Total SG&A ($MM) 2014 – 2017e – Establish competencies to achieve corporate goals and strategies 135-140 – Align incentive plans with principles and 129 competencies 123 119 – Empower leadership to drive change and support value creation process • Process – Restructured corporate functions to support strategy execution – Establish process framework vs. break/fix cycle – Proactively manage enterprise risk across the organization • Technology 2014 2015 2016 2017e – Develop IT strategy and roadmap to manage business priorities and replace patchwork legacy SG&A per Store* (K) systems 2014 – 2017e – Invest in scalable and secure technology 94 97 88 93 platforms – Upgrade capabilities in line with major retailing standards *Using end-of-year store count Murphy USA Inc. 10
Shares Outstanding Capital allocation balances growth and capital returns Capital Allocation ($MM) Capital Allocation 2014 - 2016 2014 - 2016 $1,242 Retail Growth Capital $587 $623 39% $464 $323 50% $248 $191 $619 $52 7% $264 Share 4% $216 Retail Repurchases $139 Maintenance Corporate Capital Capital 2014 2015 2016 3-Year Total Share Repurchases Capital Expenditures Murphy USA Inc. 11
Recommend
More recommend
