Operational performance highlights the
strength of our business, brands and customer proposition
Financial results primarily impacted by lower
global refining margins
Demonstrating progress toward 2028
ambitions
CALGARY,
AB, Oct. 30, 2024 /PRNewswire/ - Parkland
Corporation ("Parkland", "we", the "Company", or "our") (TSX: PKI),
today announced its financial and operating results for the three
and nine months ended September 30,
2024.
"The Parkland Team remains focused on executing our strategic
plan and achieving strong operational metrics across the business
relative to industry. Although our third quarter 2024 financial
results fell short of expectations, this was primarily driven by a
challenging refining margin environment," said Bob Espey, President and Chief Executive
Officer. "Our business continues to show strength through increased
market share in a soft economic environment. Adjusted EBITDA from
our Retail and Commercial lines of business grew by two percent
over the last twelve months, demonstrating progress on the organic
growth initiatives required to deliver on our 2028 ambitions."
Q3 2024 Highlights
- Adjusted EBITDA1 of $431
million, a decrease of 26 percent as compared to Q3 2023,
largely due to lower refinery margins in the third quarter of 2024,
despite strong operational execution.
- Net earnings of $91 million
($0.52 per share, basic), a decrease
of 60 percent as compared to Q3 2023, and Adjusted
earnings2 of $106 million
($0.61 per share, basic2),
a decrease of 54 percent from Q3 2023, largely due to lower
refinery margins in the third quarter of 2024.
- Trailing-twelve-month ("TTM") Available cash flow2
of $627 million ($3.58 per share2), a decrease of 16
percent from the same period in 2023, and TTM Cash generated from
(used in) operating activities3 of $1,490 million ($8.51 per share3), a decrease of 25
percent from the same period in 2023, largely due to the unplanned
shutdown of the Burnaby Refinery in the first quarter of 2024 and
lower refining margins in the third quarter of 2024.
- TTM Adjusted EBITDA from our Retail and Commercial lines
of business4 of $1,568
million, an increase of two percent from the same period in
2023, reflecting organic growth, synergy capture and cost
reductions.
- Purchased and cancelled approximately 382,000 Parkland common
shares for $14 million, in line with
our disciplined capital allocation.
- Liquidity available3 increased to $2 billion ($1,246
million in Q2 2024), reflecting the senior unsecured note
issuance used to repay drawings under the Company's credit
facilities during the quarter, and Leverage Ratio5
increased to 3.4 times (3.1 times in Q2 2024), reflecting debt
repayments being more than offset by lower TTM Adjusted
EBITDA.
- Return on invested capital2 ("ROIC") decreased to
7.8 percent from 9.5 percent for the trailing twelve months ended
September 30, 2024, as compared to
the same period in 2023.
- Announced intention to divest our Florida-based retail and commercial
businesses, reflecting our commitment to disciplined capital
allocation and redirecting capital towards our highest return
opportunities that maximize shareholder value.
|
_____________________________
|
|
1
|
Total of segments
measure. See "Measures of Segment Profit and Total of Segments
Measures" section of this news release.
|
|
2
|
Non-GAAP financial
measure or non-GAAP financial ratio. See "Non-GAAP Financial
Measures and Ratios" section of this news release.
|
|
3
|
Supplementary financial
measure. See "Supplementary Financial Measures" section of this
news release.
|
|
4
|
Line of business
Adjusted EBITDA. Please refer to note 14 of the Q3 2024 Interim
Condensed Consolidated Financial Statements (as defined in this
news release) for further information. TTM measure is a
summation of Q4 2023 through Q3 2024 line of business Adjusted
EBITDA.
|
|
5
|
Capital management
measure. See "Capital Management Measures" section of this news
release.
|
Q3 2024 Segment Highlights
- Canada delivered Adjusted
EBITDA of $200 million, in line with
Q3 2023 ($206 million). Performance
was underpinned by strong fuel unit margins from continued price
and supply optimization despite lower consumer demand. Company
same-store volume growth ("Company SSVG")6 was 1.4
percent, compared to 4.2 percent in Q3 2023. Food and Company
C-Store SSSG (excluding cigarettes)2 was (1.1) percent,
compared to 3.6 percent, in Q3 2023. These decreases were primarily
driven by economic conditions that have reduced discretionary
spending for consumers. Canada
delivered Food and Company C-store revenue of $82 million, consistent with Q3 2023
($81 million).
- International delivered Adjusted EBITDA of $152 million, down 11 percent from Q3 2023
($170 million). The decrease was
primarily driven by lower wholesale volumes, partially offset by
continued growth in our retail, commercial and aviation base
businesses.
- USA delivered Adjusted EBITDA
of $54 million, in line with Q3 2023
($52 million). Performance was
underpinned by improved supply optimization despite lower consumer
demand.
- Refining delivered Adjusted EBITDA of $49 million, compared to $188 million in Q3 2023. This decrease was
primarily driven by lower refining margins. Strong composite
utilization6 at the Burnaby Refinery of 102 percent,
compared to 103 percent in Q3 2023.
- Parkland's total recordable injury frequency rate6
on a TTM basis was 1.04, compared to 0.95 at September 30, 2023.
|
__________________________
|
|
6
|
Non-financial measure.
See "Non-Financial Measures" section of this news
release.
|
2024 Guidance
As a result of the unplanned shutdown at the Burnaby Refinery in
the first quarter of 2024, and unfavorable market conditions
experienced for the first nine months of 2024, primarily due to
lower refining margins in the third quarter of 2024, which are
expected to persist for the remainder of the year, Parkland has
further revised its 2024 Adjusted EBITDA Guidance3 to
$1,700 million - $1,750 million(the "Updated 2024 Adjusted EBITDA
Guidance Range"). This represents a $200
million - $250 million
decrease in guidance range from our previous guidance range of
$1,900 million - $2,000 million.
Furthermore, Parkland has revised its 2024 Available cash flow
per share Guidance and 2024 ROIC Guidance, as a result of the
factors outlined above, as follows:
- 2024 ROIC Guidance2 is revised to approximately 8
percent, from more than 11 percent (the "Revised 2024 ROIC
Guidance");
- 2024 Available cash flow per share Guidance2 is
revised to approximately $3.75 per
share, from $5.00 per share (the
"Revised 2024 Available cash flow per share Guidance").
Consolidated Financial Overview
|
($ millions, unless
otherwise noted)
|
Three months
ended September 30,
|
|
Financial
Summary
|
2024
|
2023
|
|
Sales and operating
revenue
|
7,126
|
8,731
|
|
Adjusted
EBITDA(1)
|
431
|
585
|
|
Canada(2)
|
200
|
206
|
|
International(2)
|
152
|
170
|
|
USA(2)
|
54
|
52
|
|
Refining(2)
|
49
|
188
|
|
Corporate(2)
|
(24)
|
(31)
|
|
Net earnings
(loss)
|
91
|
230
|
|
Net earnings (loss) per
share – basic ($ per share)
|
0.52
|
1.31
|
|
Net earnings (loss) per
share – diluted ($ per share)
|
0.52
|
1.28
|
|
Trailing-twelve-month
("TTM") Cash generated from (used in) operating
activities(3)
|
1,490
|
1,992
|
|
TTM Cash generated from
(used in) operating activities per share(3)
|
8.51
|
11.39
|
|
TTM Available cash
flow(4)
|
627
|
749
|
|
TTM Available cash flow
per share(4)
|
3.58
|
4.28
|
|
TTM Return on invested
capital(4)
|
7.8 %
|
9.5 %
|
|
1
|
Total of segments
measure. See "Measures of Segment Profit and Total of Segments
Measures" section of this news release.
|
|
2
|
Measure of segment
profit (loss). See "Measures of Segment Profit and Total of
Segments Measures" section of this news release.
|
|
3
|
Supplementary financial
measure. See "Supplementary Financial Measures" section of this
news release.
|
|
4
|
Non-GAAP financial
measure or non-GAAP financial ratio. See "Non-GAAP Financial
Measures and Ratios" section of this news release.
|
Q3 2024 Conference Call and Webcast Details
Parkland will host a webcast and conference call on Thursday, October 31, 2024 at 6:30 am MT (8:30 am
ET) to discuss the results. To listen to the live webcast
and watch the presentation, please use the following link:
https://app.webinar.net/01ap5P1mzRe
Analysts and investors interested in participating in the
question and answer session of the conference call may do so by
calling 1-888-510-2154 (toll-free) (Conference ID: 03367).
International participants may call 1-437-900-0527 (toll-free)
(Conference ID: 03367).
Please connect and log in approximately 10 minutes before the
beginning of the call. The webcast will be available for replay two
hours after the conference call ends at the link above. It will
remain available for one year and will also be posted at
www.parkland.ca.
MD&A and Interim Condensed Consolidated Financial
Statements
The Management's Discussion and Analysis for the three and nine
months ended September 30, 2024 (the
"Q3 2024 MD&A") and Interim Condensed Consolidated Financial
Statements for the three and nine months ended September 30, 2024 (the "Q3 2024 Interim
Condensed Consolidated Financial Statements") provide a detailed
explanation of Parkland's operating results for the three and nine
months ended September 30, 2024. An
English version of these documents will be available online at
www.parkland.ca and the System for Electronic Data Analysis
and Retrieval + ("SEDAR+") after the results are released by
newswire under Parkland's profile at www.sedarplus.ca. The French
versions of the Q3 2024 MD&A and the Q3 2024 Interim Condensed
Consolidated Financial Statements will be posted to
www.parkland.ca and SEDAR+ as soon as they become
available.
About Parkland Corporation
Parkland is an international fuel distributor, marketer, and
convenience retailer with operations in 26 countries across the
Americas. We serve over one million customers each day. Our retail
network meets the fuel and convenience needs of everyday consumers.
Our commercial operations provide businesses with industrial fuels
so that they can better serve their customers. In addition to
meeting our customers' needs for essential fuels, we provide a
range of choices to help them lower their environmental impact.
These include renewable fuels sourcing, manufacturing and blending,
carbon and renewables trading, solar power, and ultra-fast EV
charging. With approximately 4,000 retail and commercial locations
across Canada, the United States and the Caribbean region, we have developed supply,
distribution and trading capabilities to accelerate growth and
business performance.
Our strategy is focused on two pillars: our Customer Advantage
and our Supply Advantage. Through our Customer Advantage, we aim to
be the first choice of our customers, cultivating their loyalty
through proprietary brands, differentiated offers, our extensive
network, competitive pricing, reliable service, and our compelling
loyalty program. Our Supply Advantage is based on achieving the
lowest cost to serve among independent fuel marketers and
distributors in the hard-to-serve markets in which we operate,
through our well-positioned assets, significant scale, and deep
supply and logistics capabilities. Our business is underpinned by
our people and our values of safety, integrity, community and
respect, which are deeply embedded across our organization.
Forward-Looking Statements
Certain statements contained herein constitute forward-looking
information and statements (collectively, "forward-looking
statements"). When used in this news release, the words "expect",
"will", "could", "would", "believe", "continue", "pursue" and
similar expressions are intended to identify forward-looking
statements. In particular, this news release contains
forward-looking statements with respect to, among other things:
business strategies, objectives and initiatives; Parkland's focus
on executing its strategic plan and achieving strong operational
performance metrics; Parkland's organic growth initiatives and the
progress and 2028 ambitions relating thereto; disciplined capital
allocation; Parkland's plan to divest its Florida-based retail and commercial business
and the completion thereof; Parkland's commitment to disciplined
capital allocation and redirecting capital to highest return
opportunities and expectations relating thereto; lower refining
margins expected for the rest of the year; and Parkland's Updated
2024 Adjusted EBITDA Guidance, Revised 2024 ROIC Guidance and
Revised 2024 Available cash flow per share Guidance.
These statements involve known and unknown risks, uncertainties
and other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. No assurance can be given that these expectations will
prove to be correct and such forward-looking statements included in
this news release should not be unduly relied upon. These
forward-looking statements speak only as of the date of this news
release. Parkland does not undertake any obligation to publicly
update or revise any forward-looking statements except as required
by securities law. Actual results could differ materially from
those anticipated in these forward-looking statements as a result
of numerous risks and uncertainties, many of which are beyond the
control of Parkland, including, but not limited to: general
economic, market and business conditions; Parkland's ability to
execute its business strategies, objectives, and initiatives,
including the completion, financing and timing thereof, realizing
the benefits therefrom, and meeting our targets and commitments
relating thereto; Parkland's ability to identify buyers and
complete divestments on terms reasonable to Parkland and in a
timely manner; and the assumptions and risks described under
"Cautionary Statement Regarding Forward-Looking Information" and
"Risk Factors" in Parkland's most recent Annual Information Form,
and under "Forward-Looking Information" and "Risk Factors" in the
Q3 2024 MD&A, which are incorporated by reference herein, each
as filed on SEDAR+ and available on the Parkland website at
www.parkland.ca. In addition, the Revised 2024 Adjusted EBITDA
Guidance reflects continued integration of acquired businesses,
synergy capture, and organic growth initiatives, and the key
material assumptions include: an increase in Retail and Commercial
Fuel and petroleum product adjusted gross margin of approximately 1
percent and Food, convenience and other adjusted gross margin of
approximately 5 percent as compared to the year ended December 31, 2023; the realization of
$100 million of run-rate marketing,
general and administrative expense cost efficiencies by the end of
2024; Refining adjusted gross margin of approximately $30 to $31 per
barrel and average Burnaby Refinery composite utilization of 75
percent to 80 percent (factoring in the unplanned outage) based on
the Burnaby Refinery's crude processing capacity of 55,000 barrels
per day; enhancements to operations, utilization and optimization
of supply at the Burnaby Refinery during 2024; and implementation
of ongoing cost reductions across the business. The Revised 2024
Available cash flow per share Guidance and the Revised 2024 ROIC
Guidance reflect the lower Revised 2024 Adjusted EBITDA Guidance.
In addition, the Revised 2024 Available cash flow per share
Guidance assumes a lower number of outstanding common shares
compared to 2023 as a result of share repurchases completed during
2024, and the revised 2024 ROIC Guidance assumes invested capital
grows at a slower pace than Net operating profit after tax
("NOPAT") through the remainder of 2024. The forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement.
Specified Financial Measures
This news release contains total of segments measures, non-GAAP
financial measures and non-GAAP financial ratios, supplementary
financial measures and capital management measures (collectively,
"specified financial measures"). Parkland's management uses certain
specified financial measures to analyze the operating and financial
performance, leverage, and liquidity of the business. These
specified financial measures do not have any standardized meaning
under International Financial Reporting Standards as issued by the
International Accounting Standards Board ("IFRS Accounting
Standards") and are therefore unlikely to be comparable to similar
measures presented by other companies. The specified financial
measures should not be considered in isolation or used in
substitute for measures of performance prepared in accordance with
the IFRS Accounting Standards. See
Section 16 of the Q3 2024 MD&A, which is incorporated by
reference into this news release, for further details regarding
specified financial measures used by Parkland.
Non-GAAP Financial Measures and Ratios
Adjusted earnings (loss) is a non-GAAP financial measure and
Adjusted earnings (loss) per share is a non-GAAP financial ratio,
each representing the underlying core operating performance of
business activities of Parkland at a consolidated level. The most
directly comparable financial measure to Adjusted earnings (loss)
and Adjusted earnings (loss) per share is Net earnings (loss).
Adjusted earnings (loss) and Adjusted earnings (loss) per share
represent how well Parkland's operational business is performing,
while considering depreciation and amortization, interest on leases
and long-term debt, accretion and other finance costs, and income
taxes. The Company uses these measures because it believes that
Adjusted earnings (loss) and Adjusted earnings (loss) per share are
useful for management and investors in assessing the Company's
overall performance, as they exclude certain significant items that
are not reflective of the Company's underlying business
operations.
See Section 16 of the Q3 2024
MD&A, which is incorporated by reference into this news
release, for the detailed definition and composition of Adjusted
earnings (loss) and Adjusted earnings (loss) per share.
Please see below for the reconciliation of Adjusted earnings
(loss) to net earnings (loss) and calculation of Adjusted earnings
(loss) per share.
|
Three months
ended
September 30,
|
|
($ millions, unless
otherwise stated)
|
2024
|
2023
|
|
Net earnings
(loss)
|
91
|
230
|
|
Add:
|
|
|
|
Acquisition,
integration and other costs
|
61
|
38
|
|
(Gain) loss on foreign
exchange – unrealized
|
1
|
1
|
|
(Gain) loss on risk
management and other – unrealized
|
(48)
|
(19)
|
|
Other (gains) and
losses
|
(1)
|
(37)
|
|
Other adjusting
items(1)
|
7
|
20
|
|
Tax
normalization(2)
|
(5)
|
(2)
|
|
Adjusted earnings
(loss)
|
106
|
231
|
|
Weighted average number
of common shares (million shares)(3)
|
174
|
176
|
|
Weighted average number
of common shares adjusted for the effects of dilution (million
shares)(3)
|
176
|
180
|
|
Adjusted earnings
(loss) per share ($ per share)
|
|
|
|
Basic
|
0.61
|
1.31
|
|
Diluted
|
0.60
|
1.28
|
|
1
|
Other adjusting items
for the three months ended September 30, 2024, include (i) the
share of depreciation, income taxes and other adjustments for
investments in joint ventures and associates of $4 million (2023 -
$5 million); (ii) other income of $3 million (2023 - $15 million);
(iii) realized gains and losses on risk management and other assets
and liabilities related to underlying physical sales activity in
another period of nil (2023 - $1 million gain); and (iv)
adjustment to foreign exchange losses related to cash pooling
arrangements of nil (2023 - $1 million). Other adjusting items for
the first nine months of 2024, include (i) realized gains and
losses on risk management and other assets and liabilities related
to underlying physical sales activity in another period of $12
million loss (2023 - $4 million gain); (ii) the share of
depreciation, income taxes and other adjustments for investments in
joint ventures and associates of $11 million (2023 - $11 million);
(iii) other income of $8 million (2023 - $21 million); (iv)
adjustment to foreign exchange losses related to cash pooling
arrangements of $4 million (2023 - $1 million); (v) adjustment to
realized risk management gains related to interest rate swaps as
these gains do not relate to commodity sale and purchase
transactions of $2 million (2023 - nil); and (vi) the effect of
market-based performance conditions for equity-settled share-based
award settlements of nil (2023 - $13 million).
|
|
2
|
The tax normalization
adjustment was applied to net earnings (loss) adjusting items that
were considered temporary differences, such as acquisition,
integration and other costs, unrealized foreign exchange gains and
losses, unrealized gains and losses on risk management and other,
gains and losses on asset disposals, changes in fair value of
redemption options, changes in estimates of environmental
provisions, loss on inventory write-downs for which there are
offsetting associated risk management derivatives with unrealized
gains, impairments of non-current assets. The tax impact was
estimated using the effective tax rates applicable to jurisdictions
where the related items occur.
|
|
3
|
Weighted average number
of common shares is calculated in accordance with Parkland's
accounting policy contained in Note 2 of the Annual Consolidated
Financial Statements.
|
Available cash flow is a non-GAAP financial measure and
Available cash flow per share is a non-GAAP financial ratio. The
most directly comparable financial measure for Available cash flow
and Available cash flow per share is cash generated from (used in)
operating activities. Parkland uses these measures to monitor its
ability to generate cash flow for capital allocation, including
distributions to shareholders, investment in the growth of the
business, and deleveraging. Available cash flow is calculated as
cash generated from (used in) operating activities adjusted for
items such as (i) net change in (a) non-cash working capital and
(b) other assets and other liabilities, (ii) maintenance capital
expenditures, (iii) dividends received from investments in
associates and joint ventures, (iv) interest on leases and
long-term debt, and (v) payments on principal amounts on leases.
Available cash flow per share is calculated as Available cash flow
divided by the weighted average number of outstanding common
shares. Available cash flow per share Guidance is a non-GAAP
financial ratio, which represents the forward-looking metric of
Available cash flow per share. Available cash flow per share
Guidance is calculated based on historical cash flow performance
and the assumptions made on the future performance of Parkland. See
following table for a calculation of historical Available cash flow
and Available cash flow per share and a reconciliation to cash
generated from (used in) operating activities.
|
Three months
ended
|
Trailing twelve
months ended
September 30,2024
|
|
($ millions, unless
otherwise noted)
|
December
31, 2023
|
March 31,
2024 (1)
|
June 30,
2024
|
September 30,
2024
|
|
Cash generated from
(used in) operating activities
|
417
|
217
|
450
|
406
|
1,490
|
|
Reverse: Change in
other assets and other liabilities
|
(4)
|
28
|
3
|
(68)
|
(41)
|
|
Reverse: Net change in
non-cash working capital related to operating
activities(1)
|
17
|
55
|
(34)
|
21
|
59
|
|
Include: Maintenance
capital expenditures
|
(93)
|
(59)
|
(53)
|
(71)
|
(276)
|
|
Include: Dividends
received from investments in associates and joint
ventures
|
3
|
2
|
8
|
3
|
16
|
|
Include: Interest on
leases and long-term debt
|
(88)
|
(85)
|
(88)
|
(85)
|
(346)
|
|
Include: Payments of
principal amount on leases
|
(71)
|
(71)
|
(64)
|
(69)
|
(275)
|
|
Available cash
flow
|
181
|
87
|
222
|
137
|
627
|
|
Weighted average number
of common shares (millions)(2)
|
|
|
|
|
175
|
|
TTM Available cash flow
per share
|
|
|
|
|
3.58
|
|
Three months
ended
|
Trailing twelve
months ended
September 30, 2023
|
|
($ millions, unless
otherwise noted)
|
December
31, 2022
|
March 31,
2023
|
June 30,
2023(1)
|
September
30, 2023
|
|
Cash generated from
(used in) operating activities
|
629
|
314
|
521
|
528
|
1,992
|
|
Reverse: Change in
other assets and other liabilities
|
(23)
|
11
|
(11)
|
7
|
(16)
|
|
Reverse: Net change in
non-cash working capital related to operating
activities(1)
|
(232)
|
18
|
(145)
|
(14)
|
(373)
|
|
Include: Maintenance
capital expenditures
|
(118)
|
(79)
|
(61)
|
(52)
|
(310)
|
|
Include: Dividends
received from investments in associates and joint
ventures
|
—
|
16
|
2
|
4
|
22
|
|
Include: Interest on
leases and long-term debt
|
(86)
|
(92)
|
(89)
|
(83)
|
(350)
|
|
Include: Payments on
principal amount on leases
|
(52)
|
(51)
|
(56)
|
(57)
|
(216)
|
|
Available cash
flow
|
118
|
137
|
161
|
333
|
749
|
|
Weighted average number
of common shares (millions)(2)
|
|
|
|
|
175
|
|
TTM Available cash flow
per share
|
|
|
|
|
4.28
|
|
1
|
For comparative
purposes, certain amounts within net change in non-cash working
capital related to operating activities for the three months
ended March 31, 2024, and the three months ended June 30, 2023
were revised to conform to the current period
presentation.
|
|
2
|
Weighted average number
of common shares is calculated in accordance with Parkland's
accounting policy contained in Note 2 of the Annual Consolidated
Financial Statements.
|
ROIC is a non-GAAP financial ratio. The measure is calculated as
a ratio of NOPAT divided by average invested capital. NOPAT
describes the profitability of Parkland's base operations,
excluding the impact of leverage and certain other items of income
and expenditure that are not considered representative of
Parkland's underlying core operating performance. NOPAT is based on
Adjusted EBITDA, defined in the "Measures of Segment Profit and
Total of Segments Measures" section of this news release, less
depreciation expense and the estimated tax expense using the
expected average tax rate estimated using statutory tax rates in
each jurisdiction where Parkland operates. Average invested capital
is the amount of capital deployed by Parkland that represents the
average of opening and closing debt and shareholder's equity,
including equity reserves, net of cash and cash equivalents. We use
this non-GAAP financial ratio to assess Parkland's efficiency in
investing capital. ROIC Guidance is a non-GAAP financial ratio,
which represents the forward-looking metric of ROIC. ROIC Guidance
is calculated based on the historic ROIC performance and the
assumptions made on the future performance of Parkland.
|
($ millions, unless
otherwise noted)
|
Three months
ended
|
Trailing twelve
months ended
September 30, 2024
|
|
ROIC
|
December
31, 2023
|
March 31,
2024
|
June 30,
2024
|
September
30, 2024
|
|
Net earnings
(loss)
|
86
|
(5)
|
70
|
91
|
242
|
|
Add/(less):
|
|
|
|
|
|
|
Income tax expense
(recovery)
|
(15)
|
(29)
|
20
|
17
|
(7)
|
|
Acquisition,
integration and other costs
|
42
|
30
|
46
|
61
|
179
|
|
Depreciation and
amortization
|
222
|
206
|
202
|
207
|
837
|
|
Finance cost
|
89
|
91
|
99
|
96
|
375
|
|
(Gain) loss on foreign
exchange - unrealized
|
—
|
3
|
4
|
1
|
8
|
|
(Gain) loss on risk
management and other - unrealized
|
28
|
3
|
56
|
(48)
|
39
|
|
Other (gains) and
losses
|
5
|
10
|
(1)
|
(1)
|
13
|
|
Other adjusting
items
|
6
|
18
|
8
|
7
|
39
|
|
Adjusted
EBITDA
|
463
|
327
|
504
|
431
|
1,725
|
|
Less:
Depreciation
|
(222)
|
(206)
|
(202)
|
(207)
|
(837)
|
|
Adjusted
EBIT
|
241
|
121
|
302
|
224
|
888
|
|
Average effective tax
rate
|
|
|
|
|
19.0 %
|
|
Less: Taxes
|
|
|
|
|
(169)
|
|
Net operating profit
after tax
|
|
|
|
|
719
|
|
Opening invested
capital
|
|
|
|
|
9,238
|
|
Closing invested
capital
|
|
|
|
|
9,125
|
|
Average invested
capital
|
|
|
|
|
9,182
|
|
Return on invested
capital
|
|
|
|
|
7.8 %
|
|
($ millions, unless
otherwise noted)
|
September 30,
2024
|
September 30,
2023
|
|
Invested
capital
|
|
Long-term debt -
current portion
|
220
|
180
|
|
Long-term
debt
|
6,104
|
6,227
|
|
Shareholders'
equity
|
3,164
|
3,259
|
|
Exclude: Cash and cash
equivalents
|
(363)
|
(428)
|
|
Total
|
9,125
|
9,238
|
|
($ millions, unless
otherwise noted)
|
Three months
ended
|
Trailing twelve
months ended
September 30, 2023
|
|
ROIC
|
December
31, 2022
|
March 31,
2023
|
June 30,
2023
|
September
30, 2023
|
|
Net earnings
|
69
|
77
|
78
|
230
|
454
|
|
Add/(less):
|
|
|
|
|
|
|
Income tax expense
(recovery)
|
22
|
(20)
|
18
|
54
|
74
|
|
Acquisition,
integration and other costs
|
41
|
27
|
39
|
38
|
145
|
|
Depreciation and
amortization
|
212
|
190
|
206
|
205
|
813
|
|
Finance cost
|
94
|
104
|
98
|
93
|
389
|
|
(Gain) loss on foreign
exchange - unrealized
|
8
|
7
|
27
|
1
|
43
|
|
(Gain) loss on risk
management and other - unrealized
|
9
|
(32)
|
(11)
|
(19)
|
(53)
|
|
Other (gains) and
losses
|
(21)
|
21
|
14
|
(37)
|
(23)
|
|
Other adjusting
items
|
21
|
21
|
1
|
20
|
63
|
|
Adjusted
EBITDA
|
455
|
395
|
470
|
585
|
1,905
|
|
Less:
Depreciation
|
(212)
|
(190)
|
(206)
|
(205)
|
(813)
|
|
Adjusted
EBIT
|
243
|
205
|
264
|
380
|
1,092
|
|
Average effective tax
rate
|
|
|
|
|
18.3 %
|
|
Less: Taxes
|
|
|
|
|
(200)
|
|
Net operating profit
after tax
|
|
|
|
|
892
|
|
Opening invested
capital
|
|
|
|
|
9,521
|
|
Closing invested
capital
|
|
|
|
|
9,238
|
|
Average invested
capital
|
|
|
|
|
9,380
|
|
Return on invested
capital
|
|
|
|
|
9.5 %
|
|
($ millions, unless
otherwise noted)
|
September 30,
2023
|
September 30,
2022
|
|
Invested
capital
|
|
Long-term debt -
current portion
|
180
|
151
|
|
Long-term
debt
|
6,227
|
6,617
|
|
Shareholders'
equity
|
3,259
|
2,485
|
|
Sol Put
Option
|
—
|
629
|
|
Exclude: Cash and cash
equivalents
|
(428)
|
(361)
|
|
Total
|
9,238
|
9,521
|
Food and Company C-Store SSSG is a non-GAAP financial ratio and
refers to the period-over-period sales growth generated by retail
food and convenience stores at the same Company sites. The effects
of opening and closing stores, temporary closures (including
closures for On the Run / Marché Express conversions), expansions
of stores, renovations of stores, and stores with changes in food
service models in the period are excluded to derive a comparable
same-store metric. Same-store sales growth is a metric commonly
used in the retail industry that provides meaningful information to
investors in assessing the health and strength of Parkland's brands
and retail network, which ultimately impacts financial performance.
The most directly comparable financial measure to Food and Company
C-Store SSSG is food and convenience store revenue within sales and
operating revenue.
Below is a reconciliation of convenience store revenue (Food and
C-Store revenue) for the Canada
segment with the Food and Company C-Store same store sales ("SSS"),
and the calculation of the Food and Company C-Store SSSG.
|
Three months ended
September 30,
|
|
($ millions, unless
otherwise noted)
|
2024
|
2023
|
%(1)
|
|
Food and Company
C-Store revenue
|
82
|
81
|
|
|
Add:
|
|
|
|
|
Point-of-sale ("POS")
value of goods and services sold at Food and Company C-Store
operated by retailers and franchisees(2)
|
314
|
331
|
|
|
Less:
|
|
|
|
|
Rental and royalty
income from retailers, franchisees and
other(3)
|
(61)
|
(67)
|
|
|
Same Store revenue
adjustments(4) (excluding cigarettes)
|
(15)
|
(13)
|
|
|
Food and Company
C-Store same-store sales (including cigarettes)
|
320
|
332
|
(3.8) %
|
|
Less:
|
|
|
|
|
Same Store revenue
adjustments(4) (cigarettes)
|
(109)
|
(118)
|
|
|
Food and Company
C-Store same-store sales (excluding cigarettes)
|
211
|
214
|
(1.1) %
|
|
Three months ended
September 30,
|
|
($ millions, unless
otherwise noted)
|
2023
|
2022
|
%(1)
|
|
Food and Company
C-Store revenue
|
81
|
69
|
|
|
Add:
|
|
|
|
|
Point-of-sale ("POS")
value of goods and services sold at Food and Company C-Store
operated by retailers(2)
|
329
|
302
|
|
|
Less:
|
|
|
|
|
Rental income from
retailers and other(3)
|
(64)
|
(54)
|
|
|
Same Store revenue
adjustments(4)(5) (excluding cigarettes)
|
(37)
|
(17)
|
|
|
Food and Company
C-Store same-store sales (including cigarettes)
|
309
|
300
|
3.0 %
|
|
Less:
|
|
|
|
|
Same Store revenue
adjustments(4)(5) (cigarettes)
|
(108)
|
(105)
|
|
|
Food and Company
C-Store same-store sales (excluding cigarettes)
|
201
|
195
|
3.6 %
|
|
(1)
|
Percentages are
calculated based on actual amounts and are impacted by
rounding.
|
|
(2)
|
POS values used to
calculate Food and Company C-Store SSSG are not a Parkland
financial measure and do not form part of Parkland's consolidated
financial statements as Parkland earns rental income from retailers
in the form of a percentage rent on convenience store sales. POS
values are calculated based on the information obtained from
Parkland's POS systems at retail sites, including transactional
data, such as sales, costs and volumes, which are subject to
internal controls over financial reporting. We also use this data
to calculate rental income from retailers in the form of a
percentage rent on convenience store sales, which is recorded as
revenue in our consolidated financial statements.
|
|
(3)
|
Includes rental income
from retailers in the form of a percentage rent on Food and Company
C-Store sales, royalty, and franchisee fees and excludes revenues
from automated teller machines, POS system licensing fees, and
other.
|
|
(4)
|
This adjustment
excludes the effects of acquisitions, opening and closing stores,
temporary closures (including closures for On the Run / Marché
Express conversions), expansions of stores, renovations of stores,
and stores with changes in food service models, to derive a
comparable same-store metric.
|
|
(5)
|
Excludes sales from
acquisitions completed within the year as these will not impact the
metric until after the completion of one year of the acquisitions
when the sales or volume generated establishes the baseline for
these metrics.
|
These non-GAAP financial measures and ratios should not be
considered in isolation or used in substitute for measures of
performance prepared in accordance with IFRS Accounting Standards.
Except as otherwise indicated, these non-GAAP financial measures
and ratios are calculated and disclosed on a consistent basis from
period to period. See Section 16 of
the Q3 2024 MD&A, which is incorporated by reference into this
news release, for further details regarding Parkland's non-GAAP
financial measures and ratios.
Capital Management Measures
Parkland's primary capital management measure is the Leverage
Ratio, which is used internally by key management personnel to
monitor Parkland's overall financial strength, capital structure
flexibility, and ability to service debt and meet current and
future commitments. In order to manage its financing requirements,
Parkland may adjust capital spending or dividends paid to
shareholders, or issue new shares or new debt. The Leverage Ratio
is calculated as a ratio of Leverage Debt to Leverage EBITDA and
does not have any standardized meaning prescribed under IFRS
Accounting Standards. It is therefore unlikely to be comparable to
similar measures presented by other companies. The detailed
calculation of Leverage Ratio is as follows:
|
($ millions, unless
otherwise noted)
|
September 30,
2024
|
June 30,
2024
|
December 31,
2023
|
|
Leverage
Debt
|
5,091
|
5,193
|
4,976
|
|
Leverage
EBITDA
|
1,509
|
1,674
|
1,780
|
|
Leverage
Ratio
|
3.4
|
3.1
|
2.8
|
|
($ millions, unless
otherwise noted)
|
September 30,
2024
|
June 30,
2024
|
December 31,
2023
|
|
Long-term
debt
|
6,324
|
6,488
|
6,358
|
|
Less:
|
|
|
|
|
Lease
obligations
|
(968)
|
(1,062)
|
(1,048)
|
|
Cash and cash
equivalents
|
(363)
|
(316)
|
(387)
|
|
Cash and cash
equivalents classified as held for sale
|
(23)
|
(20)
|
—
|
|
Non-recourse
debt(1)
|
—
|
—
|
|
|
Add:
|
|
|
|
|
Risk management
liability(1)
|
9
|
—
|
|
|
Non-recourse
cash(2)
|
17
|
15
|
—
|
|
Letters of credit and
other
|
95
|
88
|
53
|
|
Leverage
Debt
|
5,091
|
5,193
|
4,976
|
|
(1)
|
Represents the risk
management asset/liability associated with the spot element of the
cross currency swap designated in a cash flow hedge relationship to
hedge the variability of principal cash flows of the 2024 Senior
Notes resulting from changes in the spot exchange rates.
|
|
(2)
|
Represents Non-recourse
debt and Cash and cash equivalents balances attributable to project
financing.
|
|
Three months
ended
|
Trailing twelve
months ended
September 30, 2024
|
|
($ millions, unless
otherwise noted)
|
December 31,
2023
|
March 31,
2024
|
June 30,
2024
|
September 30,
2024
|
|
Adjusted
EBITDA
|
463
|
327
|
504
|
431
|
1,725
|
|
Share incentive
compensation
|
11
|
6
|
8
|
6
|
31
|
|
Reverse: IFRS 16
impact(1)
|
(82)
|
(83)
|
(80)
|
(84)
|
(329)
|
|
392
|
250
|
432
|
353
|
1,427
|
|
Other
adjustments(2)
|
|
|
|
|
82
|
|
Leverage
EBITDA
|
|
|
|
|
1,509
|
|
(1)
|
Includes the impact of
operating leases prior to the adoption of IFRS 16, previously
recognized under operating costs, which aligns with management's
view of the impact of earnings.
|
|
(2)
|
Includes adjustments to
normalize Adjusted EBITDA for non-recurring events relating to
unplanned shutdown resulting from extreme cold weather event,
third-party power outage and the EBITDA attributable to EV charging
operations financed through non-recourse project
financing.
|
|
Three months
ended
|
Trailing twelve months
ended
June 30, 2024
|
|
($ millions, unless
otherwise noted)
|
September 30,
2023
|
December 31,
2023
|
March 31,
2024
|
June 30,
2024
|
|
Adjusted
EBITDA
|
585
|
463
|
327
|
504
|
1,879
|
|
Share incentive
compensation
|
5
|
11
|
6
|
8
|
30
|
|
Reverse: IFRS 16
impact(1)
|
(71)
|
(82)
|
(83)
|
(80)
|
(316)
|
|
519
|
392
|
250
|
432
|
1,593
|
|
Other
adjustments(2)
|
|
|
|
|
81
|
|
Leverage
EBITDA
|
|
|
|
|
1,674
|
|
(1)
|
Includes the impact of
operating leases prior to the adoption of IFRS 16, previously
recognized under operating costs, which aligns with management's
view of the impact of earnings.
|
|
(2)
|
Includes adjustments to
normalize Adjusted EBITDA for non-recurring events relating to
unplanned shutdown resulting from extreme cold weather event,
third-party power outage and the EBITDA attributable to EV charging
operations financed through non-recourse project
financing.
|
|
Three months
ended
|
Trailing twelve months
ended
December 31, 2023
|
|
($ millions, unless
otherwise noted)
|
March 31,
2023
|
June 30,
2023
|
September 30,
2023
|
December 31,
2023
|
|
Adjusted
EBITDA
|
395
|
470
|
585
|
463
|
1,913
|
|
Share incentive
compensation
|
8
|
6
|
5
|
11
|
30
|
|
Reverse: IFRS 16
impact(1)
|
(61)
|
(68)
|
(71)
|
(82)
|
(282)
|
|
342
|
408
|
519
|
392
|
1,661
|
|
Other
adjustments(2)
|
|
|
|
|
119
|
|
Leverage
EBITDA
|
|
|
|
|
1,780
|
|
(1)
|
Includes the impact of
operating leases prior to the adoption of IFRS 16, previously
recognized under operating costs, which aligns with management's
view of the impact of earnings.
|
|
(2)
|
Includes adjustments to
normalize Adjusted EBITDA for non-recurring events relating to the
completion of turnarounds and third-party power outage.
|
Measures of Segment Profit and Total of Segments
Measures
Adjusted earnings (loss) before interest, taxes, depreciation
and amortization ("Adjusted EBITDA") is a measure of segment profit
and its aggregate is a total of segments measure used by the chief
operating decision maker to make decisions about resource
allocation to the segment and to assess its performance. In
accordance with IFRS Accounting Standards, adjustments and
eliminations made in preparing an entity's financial statements and
allocations of revenue, expenses, and gains or losses shall be
included in determining reported segment profit or loss only if
they are included in the measure of the segment's profit or loss
that is used by the chief operating decision maker. As such,
Parkland's Adjusted EBITDA is unlikely to be comparable to
similarly named measures presented by other issuers, who may
calculate these measures differently. Parkland views Adjusted
EBITDA as the key measure for the underlying core operating
performance of business segment activities at an operational level.
Adjusted EBITDA is used by management to set targets for Parkland
(including annual guidance and variable compensation targets) and
is used to determine Parkland's ability to service debt, finance
capital expenditures and provide for dividend payments to
shareholders. See Section 16 of the
Q3 2024 MD&A, which is incorporated by reference into this news
release, for further details regarding total of segments measures
used by Parkland. Refer to the table below for the reconciliation
of Adjusted EBITDA to net earnings (loss) for the three and nine
months ended September 30, 2024 and
September 30, 2023.
|
Three months
ended
September 30,
|
|
($ millions)
|
2024
|
2023
|
|
Adjusted
EBITDA
|
431
|
585
|
|
Less/(add):
|
|
|
|
Acquisition,
integration and other costs
|
61
|
38
|
|
Depreciation and
amortization
|
207
|
205
|
|
Finance
costs
|
96
|
93
|
|
(Gain) loss on foreign
exchange – unrealized
|
1
|
1
|
|
(Gain) loss on risk
management and other – unrealized
|
(48)
|
(19)
|
|
Other (gains) and
losses(1)
|
(1)
|
(37)
|
|
Other adjusting
items(2)
|
7
|
20
|
|
Income tax expense
(recovery)
|
17
|
54
|
|
Net earnings
(loss)
|
91
|
230
|
|
1
|
Other (gains) and
losses for the three months ended September 30, 2024, include (i)
$26 million non-cash valuation loss (2023 - $3 million) due to
impairment and write-offs; (ii) $25 million non-cash valuation gain
(2023 - $13 million gain) due to the change in fair value
redemption options; (iii) $5 million non-cash valuation loss (2023
- $7 million gain) due to the change in estimates of environmental
provision; (iv) $3 million (2023- $15 million) in Other income; (v)
$2 million gain (2023 - $6 million gain) on disposal of assets; and
(vi) $2 million gain (2023 - $1 million loss) in Others. Other
(gains) and losses for the first nine months of 2024, include (i)
$37 million non-cash valuation loss (2023 - $31 million) due to
impairment and write-offs; (ii) $11 million non-cash valuation gain
(2023 - $3 million loss) due to the change in estimates of
environmental provision; (iii) $8 million (2023 - $21 million) in
Other income; (iv) $5 million gain (2023 - $1 million loss) on
disposal of assets; (v) $4 million gain (2023 - $1 million loss) in
Others; and (vi) $1 million non-cash valuation gain (2023 - $17
million) due to the change in fair value of redemption options;
Refer to Note 12 of the Interim Condensed Consolidated Financial
Statements.
|
|
2
|
Other adjusting items
for the three months ended September 30, 2024, include (i) the
share of depreciation, income taxes and other adjustments for
investments in joint ventures and associates of $4 million (2023 -
$5 million); (ii) other income of $3 million (2023 - $15 million);
(iii) realized gains and losses on risk management and other assets
and liabilities related to underlying physical sales activity in
another period of nil (2023 - $1 million gain); and (iv) adjustment
to foreign exchange losses related to cash pooling arrangements of
nil (2023 - $1 million). Other adjusting items for the first nine
months of 2024, include (i) realized gains and losses on risk
management and other assets and liabilities related to underlying
physical sales activity in another period of $12 million loss (2023
- $4 million gain); (ii) the share of depreciation, income taxes
and other adjustments for investments in joint ventures and
associates of $11 million (2023 - $11 million); (iii) other income
of $8 million (2023 - $21 million); (iv) adjustment to foreign
exchange losses related to cash pooling arrangements of $4 million
(2023 - $1 million); (v) adjustment to realized risk management
gains related to interest rate swaps as these gains do not relate
to commodity sale and purchase transactions of $2 million (2023 -
nil); and (vi) the effect of market-based performance conditions
for equity-settled share-based award settlements of nil (2023 - $13
million).
|
Supplementary Financial Measures
Parkland uses a number of supplementary financial measures,
including Adjusted EBITDA Guidance, Liquidity available, TTM Cash
generated from (used in) operating activities, and TTM Cash
generated from (used in) operating activities per share, and these
measures may not be comparable to similar measures presented by
other issuers, as other issuers may calculate these measures
differently. See Section 16 of
the Q3 2024 MD&A, which is incorporated by reference into this
news release, for further details regarding supplementary financial
measures used by Parkland, including the composition of such
measures.
Non-Financial Measures
Parkland uses a number of non-financial measures, including
Company SSVG, composite utilization and total recordable injury
frequency rate, in measuring the success of our strategic
objectives and to set variable compensation targets for employees.
These non-financial measures are not accounting measures, do not
have comparable IFRS Accounting Standards measures, and may not be
comparable to similar measures presented by other issuers, as other
issuers may calculate these metrics differently. See Section 16 of the Q3 2024 MD&A, which is
incorporated by reference into this news release, for further
details on the non-financial measures used by Parkland.
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SOURCE Parkland Corporation