Parkland Lays Out Refreshed Five-Year Plan
CALGARY, Alberta — Parkland Corp. shared a preview of continued growth plans, targets and capital allocation strategy for the next five years during its 2023 Investor Day on Nov. 14. The company plans to accelerate some of its competitive plans as it grows the business.
"Since our 2021 Investor Day, we have continued to build and invest in our growth platform," said President and CEO Bob Espey. "This year, we saw the strength of our business model as we delivered strong organic growth and synergy capture, enabling us to increase adjusted EBITDA guidance, exceed our deleveraging goals, and accelerate our $2 billion ambition to 2024, a year ahead of schedule."
[Read more: Shareholder Urges Parkland to Make Value-Enhancing Changes]
"The success of Parkland's strategy is due to our industry leading team, which is focused on safe and disciplined execution," Espey continued. "Our business is growing, and we are committed to meeting the evolving needs of our customers. We are reinforcing our financial foundation, delivering substantial cash flow and, through disciplined capital allocation, we will optimize returns for our shareholders."
Key topics of Parkland's Investor Day included:
Customer Advantage
The company continues to have a customer-centric strategy that demonstrates its commitment to becoming retail and commercial customers' No. 1 choice for energy and convenience in its markets, according to Parkland. Its JOURNIE Rewards loyalty platform serves as the foundation of this strategy as it expands its suite of partners and geographic reach.
Parkland plans to use JOURNIE to continue to unify its brands and deliver personalized customer offers while incentivizing and rewarding customer loyalty across the company's retail fuel and electric vehicle charging locations, On the Run convenience stores, and food brands.
The company's customer advantage includes its diverse range of commercial customers in each of its markets. Parkland noted its extensive proprietary infrastructure and dedicated team safely and reliably delivers products to these customers to meet their energy needs of today and their evolving low-carbon needs of tomorrow.
Supply Advantage
Parkland stated that its proven supply expertise underpins its strategy and that by delivering approximately 28 billion liters of fuel annually, its scale, unique logistics assets and capabilities provide purchasing power and optionality that enable it to achieve the lowest cost to serve. Its supply optimization allows Parkland to create tremendous competitive advantage and unlock significant value in the markets in which it operates, according to the company.
Disciplined Capital Allocation
Parkland anticipates $6 billion in cumulative available cash flow from 2024 to 2028 and noted it is positioned to deliver sustainable growth, enhance shareholder returns and strengthen its balance sheet. The company's capital allocation program will direct approximately $1.5 billion (25 percent) to dividends and share buybacks, and $1.5 billion (25 percent) to organic growth initiatives that reinforce its market position.
With the remaining $3 billion (50 percent) of anticipated capital, Parkland will prioritize reducing its leverage ratio to the low end of our two to three times target range by the end of 2025. Beyond that and looking forward through 2028, it expects capital will be strategically allocated toward opportunities that generate the greatest shareholder returns, including additional share buybacks and inorganic growth opportunities, the company said, adding that this framework underscores Parkland's dedication to financial discipline and strategic agility, with the aim of delivering long-term value for its shareholders.
Parkland stated that it remains focused on executing its strategy, capturing synergies, lowering costs and delivering organic growth.
Calgary-based Parkland Corp. is an independent supplier and marketer of fuel and petroleum products and a convenience store operator. Parkland currently services customers across Canada, the United States, the Caribbean region and the Americas through three channels: retail, commercial and wholesale.