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VIVO ENERGY PLC - 2019 Half Year Results

Release Date: 01/08/2019 08:00
Code(s): VVO     PDF:  
Wrap Text
2019 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 at
https://senspdf.jse.co.za/documents/2019/jse/isse/vvoe/Vivo.pdf .Copies of the full announcement may be requested by
contacting Investor Relations at investors@vivoenergy.com.



                                                 Vivo Energy plc
                                                (LSE: VVO & JSE: VVO)

                                                     1 August 2019

                                              2019 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 2019.

Christian Chammas, CEO of Vivo Energy plc, commented: “We have continued to drive our business
forward during the half-year and delivered resilient financial results, with Adjusted EBITDA increasing by 4% to
$212 million. Volumes grew by 8% to 4,985 million litres, with lower volumes in certain Shell-branded markets
being offset by the impact of the new Engen markets, following completion of the transaction in March. We were
pleased to see gross cash unit margins stabilise at $70 per thousand litres for the period, broadly in line with how
we finished 2018 and above the average of Q1. As a result of this resilient financial performance, our interim
dividend amounts to 1.1 US cents per share, in line with our dividend policy. Looking to the rest of the year we
remain on track to achieve our expectations and are excited by the opportunities that we face across our expanded
market footprint.”


KEY PERFORMANCE INDICATORS
                                                                  Six-month      Six-month      Six-month
                                                               period ended    period ended   period ended
                                                                30 June 2019   30 June 2019   30 June 2018

($ in millions), if not otherwise indicated                    Shell-branded          Total          Total        Change
Volumes (million litres)                                               4,678          4,985          4,628            +8%

Revenues                                                               3,643          3,903          3,673            +6%

Gross Profit                                                             293            318            312            +2%

Gross Cash Unit Margin ($/’000 litres)                                    69             70             74            -5%

Gross Cash Profit                                                        322            351            344            +2%

EBITDA                                                                   188            200            176           +13%

Adjusted EBITDA                                                          198            212            204            +4%

Net Income                                                                70             72             71            +1%

Diluted EPS (US cents)                                                   n/a            5.1            5.4            -6%

Adjusted Net Income                                                      n/a             82             95           -13%

Adjusted Diluted EPS (US cents)                                          n/a            5.9            7.4           -20%




                                                           2
Financial Highlights
    - Sales volume up 8% year-on-year, mainly due to the volume contribution of Engen-branded markets
    - Shell-branded volumes up 1% due to lower Retail volumes and Commercial segment cyclicality
    - Gross profit increased 2% to $318 million, driven by higher volumes, partially offset by a lower gross cash
        unit margin in the period
    - Gross cash unit margin of $70 per thousand litres (H1 2018: $74), was lower, as expected, largely due to
        Retail margins in Morocco, partially offset by a positive contribution from Engen-branded markets
    - Adjusted EBITDA up 4% to $212 million, with EBITDA up 13% at $200 million
    - Adjusted diluted EPS was 5.9 US cents, below H1 2018, due to lower adjusted net income, primarily as a
        result of increased net finance expense and effective tax rate as well as a higher minority interest
    - Diluted headline EPS of 4.8 US cents per share (H1 2018: 5.3 US cents)
    - Declared interim dividend of 1.1 US cents per share (H1 2018: 0.7 US cents), in line with policy
    - Net debt / adjusted EBITDA ratio increased to 1.12x at 30 June 2019, due to timing of working capital
        movements

Strategic and Operational Highlights
    - Good HSSE performance, with Total Recordable Case Frequency of zero
    - Further expanded our Retail network by opening a net total of 41 new retail service stations and 50 new
        non-fuel retail offerings
    - Successful implementation of SAP S/4 HANA in 13 countries over three waves, with the last two Shell-
        branded countries due to come on stream in Q3 2019
    - Agreed a non-fuel joint venture with Kuku Foods East Africa Holdings, the owner of KFC franchises in
        East Africa, to accelerate the roll-out of KFC restaurants in Kenya, Uganda and Rwanda with expected
        completion in the second-half of the year
    - Initiatives to improve cost efficiencies and reduce operating expenditure are ongoing

Engen
Vivo Energy completed the transaction with Engen Holdings (Pty) Limited on 1 March 2019. The new Engen-
branded markets provided four months of contribution to the Group’s half-year results, with volumes for the
period of 307 million litres, gross cash profit of $29 million and adjusted EBITDA of $14 million.

Our primary focus since completion has been on integrating the new operations into the Vivo Energy systems,
supply network and culture. As part of this process, we have implemented a “balanced scorecard” covering financial,
operational and sustainability metrics in each of the new operating units that both empowers and holds accountable
local management teams. At the same time, we are providing strong central support to the new operating units to
ensure they are able to adapt to the Vivo Energy requirements.

As previously guided we do not expect to see material growth in Engen’s markets in 2019 as we are focused on the
integration of the business. However, we believe the opportunity to create value across the Engen markets is
significant over the near and medium term and in the first four months of Vivo Energy ownership have opened 6
new sites and identified opportunities to grow the business across both the Retail and Commercial segments.

Morocco Conseil de la Concurrence
Post period end, media reports in Morocco cited engagement between the Conseil de la Concurrence
(Competition Council) and industry participants, as part of its current review into competition within the Moroccan
fuel distribution industry. We take compliance with the laws and regulations of the jurisdictions in which we
operate seriously, and are fully co-operating with the Conseil de la Concurrence.

Outlook
Performance for the first half of the year remained in line with the Group’s expectations for the full year. We
continue to expect volume growth for the full year, including the Engen-branded markets, to be within our guidance
range of low to mid double-digit percentage growth. Overall gross cash unit margins are now expected to be at the
upper end of or slightly ahead of the previous guidance of the high sixties per thousand litres for the year. We also
expect to see an improvement in working capital in H2. We opened a net total of 41 service stations across our
markets in the first half of the year and are on track to achieve our target of 80-100 new sites across our markets
during 2019, with capital expenditures expected to be marginally below $150 million for the year. We are excited
by the future prospects of the enlarged Group and the opportunities that are ahead.

                                                      ENDS



                                                                                                                   3
 Results presentation
 Vivo Energy plc will host a presentation for analysts and investors today, 1 August 2019 at 09.00 BST, which can be
 accessed at: https://webcasting.brrmedia.co.uk/broadcast/5d1dfe9dda68dd4b10ae71f4.

 Participants may also dial in to the event by conference call:

 Dial-in: +44 330 336 9125 / +27 11 844 6054
 Participant access code: 6062692

 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 7715 036 407                                                  +44 20 3034 3735
rob.foyle@vivoenergy.com                                          giles.blackham@vivoenergy.com


Tulchan Communications LLP
Martin Robinson, Suniti Chauhan
+44 20 7353 4200
vivoenergy@tulchangroup.com

 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 2,100 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) to
 business customers across a range of sectors including marine, mining, construction, power, transport and
 manufacturing. Jet fuel is sold to customers under the Vitol Aviation brand.

 The Company employs around 2,600 people and has access to over 1,000,000 cubic metres of fuel storage capacity.
 The Group’s joint venture, Shell and Vivo Lubricants B.V., sources, blends, packages and supplies Shell-branded
 lubricants and has blending capacity per annum of around 158,000 metric tonnes in six countries (Ghana, Guinea,
 Côte d’Ivoire, Kenya, Morocco and Tunisia).

 For more information about Vivo Energy please visit www.vivoenergy.com




                                                                                                                        4
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. These forward-looking statements include all matters that
are not historical facts. They appear in a number of places throughout this announcement 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 announcement speak only as of the date of this announcement. The
Company and the Directors expressly disclaim any obligation or undertaking to update these forward-looking statements
contained in the document to reflect any change in their expectations or any change in events, conditions, or
circumstances on which such statements are based unless required to do so by applicable law.


JSE Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd




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Date: 01/08/2019 08:00:00
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