Amerigas Analyst Day 2014
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Transcript of Amerigas Analyst Day 2014
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11
AmeriGasJerry Sheridan
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November 6, 2014
Meeting
Commitments
Bigger is Better
Growth
Opportunities
Key Messages
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November 6, 2014
3%-4%EBITDAGrowth
Business Overview
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44
November 6, 2014
3%-4%EBITDAGrowth
Business Overview
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55
November 6, 2014
3%-4%EBITDAGrowth
Business Overview
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November 6, 2014
3%-4%EBITDAGrowth
Business Overview
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November 6, 2014
3%-4%EBITDAGrowth
Business Overview
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November 6, 2014
Largest Player in a Fragmented Market with~15% Market
Share
Over 1.3
Billion
Gallons
Sold
FY14
~Two Million
Customers
Over 2,000 Propane
Distribution Locations
~8,400 Employees
48,000 Cylinder
Exchange Points
Operations in all 50 states
Business Overview
1
1 Based on retail propane volumes sold in the United States as
published by the American Petroleum Institute
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November 6, 2014
Competitive Advantage
• Unmatched geographic coverage
• Customer density = efficiency
• Advantage in acquisitions, serving multi-state customers
• Significant transportation and logistics assets and ability to flex workforce = certainty of supply
• Geographic and end-use diversity
• Demonstrated ability to manage margins in varying product cost environments
• Counter-seasonal businesses and non-volumetric revenue streams reduce reliance on weather
• Track record of successful acquisition integration in a fragmented industry
• Strong balance sheet, conservative financing practices
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Meeting Commitments
Bigger is Better
Growth Opportunities
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1111
November 6, 2014
DISTRIBUTION
GROWTH: 5%
5.4% Average
Distribution Growth
2006-2014
HERITAGE
SYNERGIES ≥ $50MM
Adj. EBITDA Growth
2006-2011: ~6%
2006-2014: ~13%
EBITDA
GROWTH: 3-4%
$60 million+ in
synergies
GOALS ACCOMPLISHMENTS
Meeting Commitments – Promise to Investors
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3.7
3.23.0
2.5 2.6
3.1
4.8
3.9
3.6
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2006 2007 2008 2009 2010 2011 2012 2013 2014F
Debt/Adjusted EBITDA
1.21.3
1.51.4
1.31.4
0.7
1.2 1.2
0.0
0.5
1.0
1.5
2.0
2006 2007 2008 2009 2010 2011 2012 2013 2014F
Distribution Coverage
• AmeriGas has nearly doubled adjusted EBITDA while returning to
pre-acquisition credit metrics
Balance Sheet Commitments
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November 6, 2014
$255
$293
$313
$342 $340 $335
$384
$618
$665
$670-$700
$0
$100
$200
$300
$400
$500
$600
$700
$800
2006 2007 2008 2009 2010 2011 2012 2013 2014F2015G
Adjusted EBITDA* ($ millions)
$2.32
$2.44
$2.56
$2.68
$2.82
$2.96
$3.20
$3.36
$3.52
$2.20
$2.40
$2.60
$2.80
$3.00
$3.20
$3.40
$3.60
2006 2007 2008 2009 2010 2011 2012 2013 2014F
Distributions per Unit
2015 Guidance $670MM-$700MM
Growth
* See Appendix for reconciliation of Adjusted EBITDA to net income for FY13 and FY14. Reconciliations of Adjusted EBITDA provided in previous disclosures for FY06 to FY12.
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Meeting Commitments
Bigger is Better
Growth Opportunities
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10 Transflows
~400 Railroad Tank Cars
~4,000 Bobtail Trucks
Over 20 Strategically located Terminals
Bigger is Better
550 Propane Trailers
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November 6, 2014
26%
22%
25%
27%
Northwest
Southwest
Northeast
Southeast
Customer Base Geography
41%
36%
13%
10%
Residential
Commercial
Motor Fuel
Ag &
Transport
Diversification
Geographic and Customer diversity supports cash flow
and reduces weather and economic risk
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Environment Severe Weather
Supply Shortages
Volatile Costs
Solutions Significant supply and
transportation assets
Strong relationships with
suppliers
AmeriGas Airborne
Winter 2014
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A long track record of exceptional margin management through volatile propane cost environments
Pro
pa
ne
U
nit M
arg
in
s
Avg
. M
t. B
elvie
u C
ost
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Avg. Mt. Belvieu Cost Propane Unit Margins
Unit Margin Management
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Meeting Commitments
Bigger is Better
Growth Opportunities
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2020
November 6, 2014
20
400
425
450
475
500
525
550
2010 2011 2012 2013
Same customer sales
~1.5% annual conservation
AmeriGas
Conservation
Study
(1)
(1) Annual study of AmeriGas
heating customers – weather adjusted
The Propane Industry
Site Built Housing
Sloan, Michael (2012). 2013 Propane Market Outlook: Major
Trends Driving Change in the Propane Industry
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November 6, 2014
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US supply continues
to grow as more wet-
gas shale production
comes on line
Exports rising, but
U.S. remains “long”
propane
Current inventories at
all-time highs
Mont Belvieu price
$0.84 versus $1.14 at
same time last year1
The Propane Industry
1As of October 23, 2014
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November 6, 2014
• Counter seasonal due to
summer grilling demand
• Product of convenience
• Safe, reliable service
• 48,000 distribution points
• Platform grows as US
retailers expand
• Highly targeted programs
driving awareness in key
growth states
• 33 strategically located
refilling facilities
* Estimate represents multi-year average
ACCOMPLISHMENTS
Achieved 6% same
store sales growth on
existing business
1,300+ net new
installations
Volume growth: 8%
4% EBITDA growth*
expected
Growth: Cylinder Exchange
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November 6, 2014
* Estimate represents multi-year average
Utilize nationwide distribution
footprint to serve commercial
customers with multiple locations:
• One bill, one point of contact
• Less weather sensitive vs.
residential
• Built-in geographic diversity
• Multiple delivery points
• Largest sales force in the
industry
• Electronic proof of delivery
22% volume growth
in fiscal 2014
ACCOMPLISHMENTS
Rich pipeline of
targets identified
Over 50 new
accounts added in
fiscal 2014
4-6% EBITDA growth*
expected
Growth: National Accounts
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November 6, 2014
Synergies in every geography
Integration is a core competency
Seven deals closed in 2014; 73 in the past 10
years
Growth: Local Acquisitions
1987
Cal Gas
1993
Petrolane
2001
Columbia
2012
Heritage
Over 175 acquisitions since the early 1980s
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November 6, 2014
Long history of meeting commitments
o Successfully completed the Heritage acquisition while
meeting all key objectives for the investment
Significant scale enables strong performance
o Delivered exceptional operating performance during
volatile 2013/2014 winter
Utilize expanded distribution network to
deliver strong growth in ACE, National
Accounts and local acquisitions
Conclusion
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Q&A