27 Jul - 10 min read
2021 Half Year Results
2021 Half Year Results Vivo Energy plc (Incorporated in England and Wales) (Registration number: 11250655) (Share code: VVO) LEI: 213800TR7V9QN896AU56 ISIN: GB00BDGT2M75 This short form announcement is the responsibility of the Directors and represents only a summary of the information contained in the full announcement. Consequently, it does not contain full or complete details. Any investment decisions made by investors and/or shareholders should be based on consideration of the full announcement as a whole and investors and/or shareholders are encouraged to review the full announcement. The full announcement is accessible on the Company's website at https://investors.vivoenergy.com/results-centre and on the JSE website at https://senspdf.jse.co.za/documents/2021/jse/isse/VVOE/VivoHY21.pdf. Copies of the full announcement may be requested by contacting Investor Relations at firstname.lastname@example.org. 27 July 2021 Vivo Energy plc (LSE: VVO & JSE: VVO) 2021 Half Year Results Vivo Energy plc, the pan-African retailer and marketer of Shell and Engen-branded fuels and lubricants, today announces its consolidated financial results for the six months ended 30 June 2021. Christian Chammas, CEO of Vivo Energy plc, commented: “Our strong performance during H1 2021 further demonstrates the strength of our business and the resilience of the African continent. There is real momentum in the business and we delivered adjusted EBITDA of $220 million, 57% above H1 2020, and notably 4% above H1 2019. My thanks go out to all our teams for their efforts in staying safe whilst driving the business forward in the face of the continuing uncertainty created by COVID-19. We have shown once again that we can adapt to the changing operating environment whilst simultaneously supporting future earnings growth, opening 81 net new sites in the first half and continuing to broaden our customer offerings. As we move into the second half we are watchful of the potential impacts of COVID-19, but still expect Retail to lead the recovery and are demonstrating our confidence in our business by both investing in growth and delivering growing returns to shareholders.” KEY PERFORMANCE INDICATORS1 Six-month Six-month period ended period ended ($ in millions), if not otherwise indicated 30 June 2021 30 June 2020 Change Volumes (million litres) 5,009 4,618 +8% Revenues 3,989 3,375 +18% Gross Profit 343 261 +31% Gross Cash Unit Margin ($/’000 litres) 77 65 +18% Gross Cash Profit 385 300 +28% EBITDA 219 136 +61% Adjusted EBITDA 220 140 +57% Net Income 76 13 +485% Diluted EPS (US cents) 6 1 +500% Adjusted Net Income 77 16 +381% Adjusted Diluted EPS (US cents) 6 1 +500% 1 Refer to the non-GAAP financial measures definitions and reconciliations to the most comparable IFRS measures on pages 11 and 12. Financial Highlights • Revenues increased by 18% to $3,989 million (H1 2020: $3,375 million) • Gross cash profit was higher at $385 million (H1 2020: $300 million) as both volumes and unit margins rebounded from the initial impacts of COVID-19 lockdowns in H1 2020 • Volumes sold rose 8%, as mobility restrictions eased compared to H1 2020 • Gross cash unit margin of $77 per thousand litres (H1 2020: $65), remained strong • Adjusted EBITDA was $220 million, 57% higher than H1 2020, with EBITDA of $219 million • Net income increased to $76 million (H1 2020: $13 million) • Adjusted diluted EPS and basic headline EPS were both 6 US cents • Interim dividend per share of 1.7 US cents declared, in line with enhanced policy • Net debt / adjusted EBITDA ratio decreased to 0.77x at 30 June 2021 (FY 2020: 0.86x) Strategic and Operational Highlights • Enhanced measures to keep our employees protected from COVID-19 • Actively supporting the vaccination of our staff where possible • Maintained safety focus, with Total Recordable Case Frequency (TRCF) of zero • Expanded Retail footprint by a net total of 81 new retail service stations • Expanded Non-fuel retail offerings by a net total of 11 QSRs and 44 convenience retail shops H1 2021 Review The Group delivered a strong start to the year, with gross cash profit of $385 million, well ahead of H1 2020 and 10% ahead of H1 2019. This was driven by volume growth of 8% compared to H1 2020 and continuing unit margin strength. The volume recovery was led by the Retail segment, with volumes 18% ahead of H1 2020, as mobility restrictions eased and we saw the impact of the accelerated site roll-out programme and a range of marketing initiatives. Commercial volumes were 4% behind H1 2020, but excluding the impact of the supply contract that ended in Q3 2020, were 4% ahead. Lubricant volumes were also very strong, up 14% on both H1 2020 and H1 2019. Unit margins of $77 per thousand litres benefitted from the positive supply and pricing environment, particularly in Q1 2021, and from the strong performance in the Retail and Lubricants segments creating a higher margin product mix. The operational recovery drove a significant improvement in financial performance, with adjusted EBITDA of $220 million, 57% ahead of H1 2020 and 4% ahead of H1 2019. This led to earnings per share of 6 US cents, compared to 1 US cent in H1 2020 and in line with H1 2019. The Group also continued to deliver strong cash flows, even with increased investments into the Retail network, delivering adjusted free cash flow of $90 million during H1 2021. COVID-19 Update We continue to adapt to the uncertainties that COVID-19 has created across our operating countries with demand for fuel continuing to recover and remaining very resilient during the period. During the period, many of our markets experienced a further wave of infections, but unlike in Europe, the reported health impact remained limited and our markets generally kept their economies open. Over the last six months, our host governments have regularly evolved their mobility restrictions in response to changes in local case numbers, preferring to use curfews of varying durations, and temporary restrictions on regional movements in countries as their primary response. These measures naturally have an impact on mobility and therefore fuel demand but are significantly less disruptive than the full lockdowns experienced in Q2 2020. Borders have, however, largely remained closed which has both affected our Aviation business and meant that countries with large tourism industries have seen a slower recovery in retail fuel demand. In June, a number of our markets began to experience a third wave of rising case numbers and in response, amongst other measures, some governments have once again extended curfews and closed schools. To date, these actions have had a limited impact on the Group volumes in aggregate, although in Uganda, which imposed a full lockdown until the end of July, volumes have been more materially affected. Our experiences over the past year mean that as a business, we are well prepared for the continuing evolution of restrictions. We have continued to take a proactive approach to managing our operations and working practices through COVID-19, with a hybrid working system in a number of offices and depots and where possible, are actively supporting vaccinations of our staff. We will provide support to the nascent vaccination programmes where we can as we move through H2 2021, and are ensuring we are prepared for the recovery as restrictions evolve. Sustainability The Group continues to place significant focus on sustainability matters and our climate change response. Whilst sustainability is already integrated into our operations, we took the decision to form an ESG and Climate Management Committee, chaired by the CEO, to guide our future approach and support the deeper integration of climate change considerations into the business. A key focus has been preparing for our first TCFD disclosures at the end of the year. The Group continues to implement initiatives to reduce its environmental impact, and in Ghana has signed a contract to retrofit 20 sites with solar power. These will both reduce operating costs and provide over 500 tonnes of CO2 savings per annum once installed. Dividend The Board has approved an interim dividend of 1.7 US cents per share amounting to approximately $21.5 million. This is in line with the Group’s progressive dividend policy that was enhanced at the 2020 full year results. The interim dividend is expected to be paid on 10 September 2021. Due to the pandemic, the Group did not declare an interim dividend in respect of H1 2020, but declared a final dividend in respect of the full twelve months of 2020. Outlook The Group had a strong first half, and we enter H2 2021 from a position of strength. As expected, performance was led by the recovery in our Retail business as mobility restrictions eased across our markets, with margins also returning towards more normalised levels in Q2 2021. We are navigating the uncertainty created by COVID-19, and subject to any major change in mobility restrictions, our expectations for the full year remain unchanged. As we move into the second half, we expect margins to complete their normalisation, with volumes continuing their steady recovery, led by the positive momentum in the Retail segment. This has been supported by the excellent progress we have made on network expansion and we now believe we will comfortably be at the top end of our original guidance range of 90-110 net new sites by the end of the year. We will continue to support our employees, customers and communities as we deliver against our key focus areas for the year in order to capture the long-term structural growth opportunities in our markets and create sustainable value for all of our stakeholders. End Results presentation Vivo Energy plc will host an audio webcast for analysts and investors today, 27 July 2021 at 09.00 BST, which can be accessed at https://webcasting.brrmedia.co.uk/broadcast/60ddc2aa0bb2806642d68f86 Participants wishing to ask a question should dial in to the event by conference call: Dial-in: +44 330 336 9127 (UK) / +27 11 844 6054 (SA) Participant access code: 227087 The replay of the webcast will be available after the event at https://investors.vivoenergy.com Media contacts: Investor contact: Vivo Energy plc Vivo Energy plc Rob Foyle, Head of Communications Giles Blackham, Head of Investor Relations +44 20 3034 3740 / +44 7715 036 407 +44 20 3034 3735 / +44 7714 134 681 email@example.com firstname.lastname@example.org Tulchan Communications LLP Harry Cameron, Suniti Chauhan +44 20 7353 4200 email@example.com JSE Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd Notes to editors: Vivo Energy operates and markets its products in countries across North, West, East and Southern Africa. The Group has a network of over 2,400 service stations in 23 countries operating under the Shell and Engen brands and exports lubricants to a number of other African countries. Its retail offering includes fuels, lubricants, card services, shops, restaurants and other non-fuel services. It provides fuels, lubricants and liquefied petroleum gas (LPG) and solar energy solutions to business customers across a range of sectors including marine, aviation, mining, construction, power, transport and manufacturing. The Company employs around 2,700 people and has access to over 1,000,000 cubic metres of fuel storage capacity and has a joint venture, Shell and Vivo Lubricants B.V., that sources, blends, packages and supplies Shell-branded lubricants. Vivo Energy plc has a primary listing on the London Stock Exchange, and is a member of the FTSE 250 index, with a secondary inward listing on the Johannesburg Stock Exchange. For more information about Vivo Energy please visit www.vivoenergy.com Forward-looking-statements This announcement includes forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties many of which are beyond the Company's control and all of which are based on the Directors' current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as: "believe", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "continues", "assumes", "positioned", "anticipates" or "targets" or the negative thereof, other variations thereon or comparable terminology, but are not the exclusive means of identifying such statements. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this report and include statements regarding the intentions, beliefs or current expectations of the Directors or the Group concerning, among other things, the future results of operations, financial condition, prospects, growth, strategies of the Group and the industry in which it operates. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Group. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed, or implied in such forward-looking statements. Such forward-looking statements contained in this report are current only as of the date of this report. The Company and the Directors do not intend, and will not update any forward-looking statements set forth in the document. You should interpret all subsequent written or oral forward-looking statements attributable to the Group or to persons acting on the Group’s behalf as being qualified by the cautionary statements in this report. As a result, you should not place undue reliance on such forward? looking statements. This announcement may contain references to Vivo Energy’s website. These references are for convenience only and Vivo Energy is not incorporating into this announcement any material posted on www.vivoenergy.com. Date: 27-07-2021 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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