CALGARY, AB , Sept. 3, 2024 /PRNewswire-HISPANIC PR WIRE/ — Parkland Corporation (“Parkland” or the “Company”) today announced that it is beginning a process to divest its Florida-based retail and commercial businesses.
This announcement represents the continued implementation of Parkland’s strategy. In line with its strategy set in November 2023, the Company expects to double cash flow per share1 to $8.50 and increase Adjusted EBITDA1 to $2.5 billion by 2028 through continued organic growth, cost reductions and optimization of the supply chain.
“This disposition reflects our commitment to direct capital toward our highest return opportunities and maximize shareholder value,” said Bob Espey, President and CEO, Parkland. “We remain deeply committed to our North US business, which is performing well and has strong ties to Canada.”
Parkland constantly reviews all parts of its portfolio. While its improvement plan in Florida is on track, the Company has more accretive investment opportunities in other parts of its business that can provide stronger financial returns and growth.
Parkland remains focused on improving returns and increasing cash flow through disciplined capital allocation. By divesting non-core assets, the Company continues to focus on areas with the highest growth potential and strongest synergies with its core business.
Parkland’s Florida business consists of approximately 100 retail locations, nine carton facilities and four bulk storage plants and warehouses. Early indications show significant interest in our Florida assets, and we expect to complete this disposition within the next 12 to 18 months.
The announced sale of the Parkland Florida business is part of the Company’s previously announced program to sell non-core assets, which the company now expects will significantly exceed $500 million by the end of 2025.
The company expects to close the previously announced sale of its Canadian propane business in the fourth quarter of 2024. The disposition includes estimated cash proceeds of $115 million and an exclusive long-term supply contract with the new owner.
About Parkland Corporation
Parkland is an international fuel distributor, marketer and retailer with operations in 26 locations across the Americas. We serve over a million customers every day. Our retail network meets the fuel and convenience needs of everyday consumers. Our commercial operations provide industrial fuels to businesses so they can better serve their customers. In addition to meeting our customers’ essential fuel needs, we offer a variety of choices to help them reduce their environmental impact. These include the sourcing, production and blending of renewable fuels, 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 merchandising capabilities to accelerate business growth and performance.
Our strategy is focused on two pillars: our Customer Advantage and our Supply Advantage. Through Customer Advantage, we aim to be our customers’ first choice, cultivating their loyalty through proprietary brands, differentiated offerings, 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 dealers and distributors in the hard-to-serve markets in which we operate, through our well-positioned assets, significant scale and capabilities deep supply and logistics. Our business is supported by our people and our values of safety, integrity, community and respect, which are deeply embedded in our organisation.
Forward-looking statements
Certain statements contained in this news release constitute forward-looking information and statements (collectively, “forward-looking statements”). When used in this news release, the words “intend,” “continue,” “focus,” “will,” “will” and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements regarding, among other things: Parkland’s plan to divest its Florida-based retail and commercial businesses, the process related thereto and its completion and timing ; executing Parkland’s corporate strategy; Parkland doubling its free cash flow per share to $8.50 by 2028 (“Free Cash Flow Ambition”) and growing its adjusted EBITDA to $2.5 billion by in 2028 (“Ambition Adjusted EBITDA”); Parkland’s commitment to direct capital toward higher return opportunities and maximize shareholder value; Parkland’s commitment to its northern US business; accretive investment opportunities and related expectations; Parkland’s focus on improving returns, increasing cash flow and areas with the highest growth potential and strongest synergies; Parkland’s non-core asset investment program and related expectations; the completion of the sale of Parkland’s Canadian propane business on the terms and timing thereof; and Parkland’s Customer Advantage and Supply Advantage.
These statements involve known and unknown risks, uncertainties and other factors that could 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 contained in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this release. Parkland undertakes no obligation to publicly update or revise any forward-looking statements, except as required by securities laws. Actual results may differ materially from those anticipated in these forward-looking statements as a result of numerous risks, assumptions and uncertainties including, but not limited to: general economic, market and business conditions; Parkland’s ability to execute its business strategy; Parkland’s ability to identify buyers and complete sales on terms reasonable to Parkland and in a timely manner; future accretive investment opportunities; and other factors, many of which are beyond Parkland’s control. See also the risks and uncertainties described under the headings “Cautionary Statement Regarding Forward-Looking Information” and “Risk Factors” in Parkland’s Current Annual Information Form and under the headings “Forward-Looking Information” and “Risk Factors” in Parkland’s Management’s Discussion and Analysis for the most recently ended financial period (“Q2 2024 MD&A”), each as filed on SEDAR+ at www.sedarplus.ca and available on Parkland’s website at www.parkland.ca . Available cash flow per share Ambition and Adjusted EBITDA Ambition assume continued organic growth from increased capital expenditures consistent with historical returns, synergy capture from previously completed acquisitions, identified cost efficiencies, potential acquisitions (of unidentified but reflective of expected market returns and similar to expected returns from organic growth initiatives), planned major turnarounds at the Parkland refinery in Burnaby, British Columbia in 2025 and 2028, interest rates on long-term debt of bank and corporate bonds as defined in our most recent financial statements, with any maturing debt set to be retired in extended interim periods at current prevailing market rates, income taxes at expected tax rates on corporate earnings, including the impact of Pillar II legislation, and key material assumptions and risks include: continuing operations without any material economic, legal, environmental or revenue tax changes and per-share metrics impacted by share repurchases , assuming that the common shares outstanding do not change materially. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Specified financial measures This announcement refers to certain non-GAAP financial measures and ratios, total segment measures and supplemental financial measures (collectively “specified financial measures”). Free cash flow is a non-GAAP financial measure; Available cash flows per share and available cash flows per share Ambitions are non-GAAP financial reports; Adjusted EBITDA is an aggregate measure of segments; and Adjusted EBITDA Ambition is a supplementary financial measure, all of which do not have standardized meanings prescribed by International Financial Reporting Standards (“IFRS”) and may not be comparable to similar financial measures used by issuers of others, who may calculate these measures differently. See Section 16 of the Q2 2024 MD&A for a discussion of adjusted EBITDA, free cash flow and free cash flow per share and, where applicable, their reconciliations to the most closely related IFRS measures, which are incorporated herein by reference to this news release and are available on Parkland’s SEDAR+ Profile at www.sedarplus.ca. Investors are cautioned that these measures should not be interpreted as an alternative to net profit (loss), cash generated (used in) operating activities or other directly comparable financial measures determined in accordance with IFRS as an indicator of the company’s performance. Parkland. Ambition Adjusted EBITDA is the forward-looking metric of the historical measure of Adjusted EBITDA for 2028. Free Cash Flow per Share Ambition is the forward-looking metric of historical measures of available cash flow and available cash flow per share for 2028.
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