Core-Mark Holding Company, Inc.

Transcription

1 CORE-MARK 2018

2 Core-Mark Holding Company, Inc. Stephens Inc. West Coast 1X1 Conference March 15, 2018 Page 2

3 Safe Harbor & SEC Regulation G Safe Harbor Statements made in the course of this presentation that state the company s or management s hopes, beliefs, expectations or predictions of the future are forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of Actual results and performance could differ materially from those set forth in the forward-looking statements. Additional information about forward-looking statements and risk and uncertainties that could cause or contribute to actual results differing materially from those in the forward-looking statements is contained in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP Information - This presentation includes non-gaap financial measures, including net sales less excise taxes, remaining gross profit, free cash flow and adjusted earnings, before interest, taxes, depreciation and amortization (EBITDA) after certain items. These measures are classified as non-gaap financial measures by the SEC and may be different from non-gaap measures used by other companies. We believe these non-gaap financial measures provide meaningful supplemental information for investors regarding the performance of our business and allow investors to view results in a manner similar to the method used by our management. EBITDA is also among the primary measures used externally by our investors, analysts and peers in our industry for purposes of valuation and comparing our results to other companies in our industry. Our management uses net sales less excise taxes and remaining gross profit to separate changes in sales and profitability due to actual sales and other changes in core operations from the effects of increases in excise taxes, LIFO accounting, inventory holding profits and certain other items. Our presentation of this information is not intended to be considered in isolation, and these non-gaap measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Reconciliations of these non- GAAP financial measures to the most comparable measures prepared in accordance with GAAP are included in the appendix to this presentation. Page 3

4 Agenda Value Proposition Mission Statement & Values Industry Overview Leveraging Efficiencies & Growth Financial Profile Page 4

5 Core-Mark s Value Proposition Market Leader in a Highly Fragmented Industry. Large Growth Opportunity 6% of Convenience Market Share. Industry Leader in Fresh, Dairy & Other High Margin Products. Experienced & Proven Management Team. Page 5 Long Track Record of Sustained Financial Performance.

6 Living Our Mission Statement & Values Our Mission is to Be the Most Valued Marketer of FRESH and Broad-line Supply Solutions to the Convenience Retail Industry. Page 6

7 Core-Mark An Industry Leader Core-Mark C-Store Industry (North America) ~ $200 Billion At Wholesale ~ 67% Single Store Operators ~$289 Billion in North American Sales ~182 Thousand Convenience Stores ~45% of Products Come from Wholesale 34% Of All Retail Outlets Page 7

8 Page 8 Partnering w/ Best in Class Retailers

9 CM Plays a Significant Role In The Industry 130 Million Cubic ft./yr. 750 Million Pieces/yr. 80,000 SKU s 2,500 Vendors Page 9 Through 32 distribution centers, 1,300 tractors and 1,700 tri-temperature trailers Core-Mark plays a critical role in delivering FRESH and consumer packaged goods to convenience retailers. to over 45K retail locations across 50 states and 5 Canadian Provinces

10 Our Core Strategies Have Supported 27-Consecutive Quarters of Same Store Sales Growth CORE STRATEGIES

11 Leverage Operating Expenses Reduction In Cost Per Delivery Leverage Warehouse Throughput Improved Workforce Management ~250K Routes & 2.6M Stops/Yr. Reduction In Total Routes Is Worth $1,000/route ~730M Pieces/Yr. One Unit of Throughput Improvement Is Worth ~$1,000,000 ~8,000 Employees 1% Reduction in Turnover Is Worth ~$1,000,000/yr. Page 11

12 Grow Our Business Profitably Pursuit of our vision to create an efficient supply chain for our customers through VENDOR CONSOLIDATION. Leader in FRESH & FOODSERVICE products, programs and supply chain to capitalize on emerging trends. Transformative marketing and CATEGORY MANAGEMENT for convenience retailers. EXPAND OUR GEOGRAPHIC FOOTPRINT in developed convenience retail markets. Page 12

13 Vendor Consolidation Initiative Vendor Consolidation targets inefficiencies in the C-Store supply chain by putting more Direct Store Delivery (DSD) items on our trucks. Current [VA LU E] Target [VAL UE] Future 31% Broad-Line Distributor Cigarettes/Tobacco/Candy/ Snacks/Grocery/Beverage/ General Merchandise/Fresh Target DSD Items Dairy/Bread/Snacks/ General Merchandise/ Food Service Future DSD Items Frito-Lay/Chips Coca-Cola/Pepsi Beer/Wine Core-Mark s VCI and FRESH incremental sales were greater than $750M over the last 7 years. Page 13

14 THE BUSINESS CASE FOR FRESH U.S. convenience store produce sales reached 91% of Americans snack daily. Health is an important Consideration on 56% of snacking occasions. Convenience stores are a place to get fresh food items 43 % of consumers agree. 50 of Millennials agree. % Page 14 (Source: NACS State of the Industry Report)

15 Roadmap To FRESH Good-For-You Products Immediate Consumption Less Frequent Deliveries Longer Shelf Life Coffee Fresh Sandwiches Prepared Foods Milk & Dairy Products More Frequent Deliveries Shorter Shelf Life Expanded Healthy Options Made to Order Fresh Foods Home Meal Replacement More Frequent Deliveries Shorter Shelf Life Page 15

16 Focused Marketing Initiative (FMI) Customized Cover Page Store s current store-front photo, address and account number. Retail Survey Analysis Store s current retails versus the competition, highlighting profit opportunities. Demographics Analysis Consumer profile analytics providing critical insights. Space Rationalization Analysis of the annual $-per-linear foot for key categories. Vendor Consolidation Insights on optimizing their supply chain. Fresh Programs Fresh item & program solutions. Product Mix Optimization Ensuring our customer is stocking the top-selling items. Enhance The Consumer Offer Key marketing programs that fit the store s consumer purchase behavior. Page 16

17 Focused Marketing Performance Metrics ~4,300 MARKETING PLANS completed in The average PROFIT OPPORTUNITY for an FMI store is $30,000. CUSTOMER ACCEPTANCE RATE of 65% in 2017 Stores experienced a $325/month lift in NON-CIGARETTE SALES. Page 17

18 2018 Guidance $16.6 Billion-$16.8 Billion

19 2018 Guidance $157 Million-$167 Million

20 Core-Mark s Value Proposition Market Leader in a Highly Fragmented Industry. Large Growth Opportunity 6% of Convenience Market Share. Industry Leader in Fresh, Dairy & Other High Margin Products. Experienced & Proven Management Team. Page 20 Long Track Record of Sustained Financial Performance.

21 THANK YOU MS. MILTON DRAPER DIRECTOR OF INVESTOR RELATIONS (650)