investor presentation · presentation is as of january 31, 2019 and january 31, 2018, respectively,...

Investor PresentationThird Quarter Fiscal 2019

March 26, 2019

2

Safe Harbor Statements

This presentation is dated as of March 26, 2019 and speaks as of that date. Unless otherwise noted specifically, all “YTD 2019” and comparative “YTD 2018” information in this

presentation is as of January 31, 2019 and January 31, 2018, respectively, such dates being the close of our second fiscal quarter.

Forward-Looking Statements

This presentation contains statements that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking

statements include any statements relating to our possible or assumed future results of operations, business strategies, growth opportunities, and performance improvements at our

stores. There are a number of known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from any future results expressed or

implied by those forward-looking statements, including our ability to execute our value creation plan or to realize benefits therefrom, as well as other risks, uncertainties and factors

which are described in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as filed with the Securities and Exchange Commission and available on our

website. Any forward-looking statements contained in this presentation represent our current views as of the date of this presentation with respect to future events, and Casey's

disclaims any intention or obligation to update this presentation or revise any forward-looking statements attached in this presentation whether as a result of new information, future

events, or otherwise.

Use of Non-GAAP Measures

This presentation includes references to "EBITDA," which we define as net income before net interest expense, depreciation and amortization, and income taxes. EBITDA is not

presented in accordance with accounting principles generally accepted in the United States ("GAAP"). We believe EBITDA is useful to investors in evaluating our operating

performance because securities analysts and other interested parties use such calculations as a measure of financial performance and debt service capabilities, and it is regularly used

by management for internal purposes including our capital budgeting process, evaluating acquisition targets, and assessing store performance. EBITDA is not a recognized term under

GAAP and should not be considered a substitute for net income, cash flows from operating activities or other income or cash flow statement data. EBITDA has limitations as an

analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We strongly encourage investors to review our financial

statements and publicly filed reports in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, EBITDA, as defined

by us, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare our use of this non-GAAP financial measure with

those used by other companies. Reconciliations of EBITDA to GAAP net income for completed fiscal years can be found in our annual reports on Form 10-K, filed with the SEC.

Reconciliations of EBITDA to GAAP net income for the third quarter of our 2019 fiscal year and for the first three quarters of our 2019 fiscal year can be found in our quarterly report on

Form 10-Q for the quarter ended 1/31/2019, filed with the SEC.

3

4th Largest Convenience Store Business in North America1

$4.6 billion+Total Enterprise Value

2,100+Locations in 16 States

37,000+Total Employees

600 million+Customers/Year

Stock Information

NASDAQ: CASY

Common Shares: 37.0 million

Market Cap: $4.6 billion

Avg Daily Volume: 339,000 shares

Investor Relations Contact

Bill Walljasper, CFO

(515) 965-6505

[email protected]

Positive ◊ Polite ◊ Professional ◊ Proud

LTM Growth

1 By number of stores in North America

4

Unique Distribution Fulfills Store and Customer Needs

2 - Terre Haute, IN

Fuel Distribution

1

2

1 - Ankeny, IA

500 Mile Distribution Radius

1

2

Distribution Infrastructure

5

Unique Store Base – 1,000 to 20,000 Population Communities

State Total2With

Casey’ s

Without

Casey’ s

Arkansas 171 22 149

N. Dakota 45 11 34

Oklahoma 200 20 180

Kentucky 189 11 178

Tennessee 197 11 186

Ohio 447 7 440

Michigan 298 1 297

Subtotal –

Newer1,547 83 1,464

All States 3,858 1,194 2,664

State Total2With

Casey’ s

Without

Casey’ s

Iowa 252 230 22

Illinois 547 301 246

Missouri 306 185 121

Kansas 172 101 71

Minnesota 300 109 191

Nebraska 96 58 38

Indiana 262 80 182

S. Dakota 59 26 33

Wisconsin 317 21 296

Subtotal -

Core2,311 1,111 1,200

56%

15%

11%

18%Under5,000

5,000 to10,000

10,000 to20,000

Over20,000

Core States New States1

Stores by Population

1 States new to Casey’s within the last 10 years

2 Source: http://factfinder.census.gov; Estimated 2016 Pop.

http://factfinder.census.gov/

6

Fiscal 2018 by Category

Revenue Gross Profit

61%

26%

12%1%

Fuel

Grocery & OtherMerchandise

Prepared Food &Fountain

Other

23%

39%

35%

3%

Fuel

Grocery & OtherMerchandise

Prepared Food &Fountain

Other

$8.39 Billion $1.77 Billion

7

Digital EngagementSame-Store Sales growth Expected starting FY2020

Value Creation Plan

Fleet CardExpected to Drive Increased In-Store Traffic and Fuel Sales starting FY2019

Focus on Operating ExpensesContinuing to Drive Efficiencies through Enhanced Cost Initiatives

Capital AllocationDisciplined Approach to Capital Allocation to Increase Shareholder Value

Board and GovernanceHigh Quality Independent Directors with World-Class Experience; Enhancing our Corporate Governance Profile

Price OptimizationProfitability Benefits Expected starting FY2019

8

Customer

Data

Increased Fuel Sales

Higher

In-store Sales

Repeat Purchases

and Customer

Loyalty

Increasing Total Sales Through Fleet Card

» Over 1,000 new accounts and 6,000 new cards issued

since launching the program in late October 2018

» Fuel and in-store sales benefits starting Q3/Q4 FY2019

with future benefits expected as program ramps up

» Casey’s locations and prepared food offerings are ideally

aligned with third party study of fleet driver preferences

» Assumptions for incremental fuel volumes and in-store

sales were benchmarked off of industry best practices

and initial results are inline with our original assumptions

» Initial incremental fuel volume opportunity of 2%

Led by a team with relevant implementation and execution experience, the Fleet Card program is

expected to increase fuel sales and drive traffic within stores

Fleet Card

9

Q4 FY2018

Q3 FY2019

Q4 FY2019

Q1 FY2020

Q1 FY2020

Q4 FY2019

Q1 FY2020

Vendors selected: PriceAdvantage for fuel and Dunnhumby

for In-Store

PriceAdvantage 100 store pilot completed

Next Steps

Fuel

Rollout of PriceAdvantage to all sites

All sites live on PriceAdvantage

Begin Integration of PriceAdvantage with point of sale

and digital price signs

In-Store

Complete Dunnhumby pilot

Rollout of Dunnhumby to more inside categories

(dependent on outcome of pilot)

Driving Performance Through Price Optimization

Centralized fuel

pricing strategy

driven by local

market dynamics

Fuel

Price Optimization provides visibility and precision to drive our pricing and promotion strategy

In-Store

Optimized product

pricing and

assortment across

all categories

Transforming our Marketing Process

Through New Technology

» Rules Based Pricing / Everyday Optimization

» Promotion Optimization

Price Optimization Roadmap

10

Digital Journey

Enhancing Our Customer Centric Business Through Digital Engagement

Identify and

Understand

Customers

Provide Seamless

Convenience for

Customers

Implement Personalized

Marketing and Rewards

Expect to begin realizing significant benefits in FY 2020

Digital

Strategy

Website enhancement design phase

Enterprise and services integration

In-store technology design, build and pilot

Integrated commerce platform (imminent)

Enhanced customer analytics and digital

engagement

Partnered with Deloitte Digital team to

develop detailed business case and roadmap

New CMO who will lead digital

implementation

FY2019

FY2020-2021

Objectives

» Seamless: A frictionless e-commerce experience

across all customer facing touchpoints

» Agile: Exceed customer expectations through

technology and organizational capabilities

» Intelligent: Know every one of our customers

(through CRM analytics)

» Proactive: Acquire and continually delight our

customer (through CRM analytics, loyalty, digital

marketing)

Mobile app redesign and pilot

Mobile app launch

Loyalty program

In-store technology integration

Expansion of online products and services

Design

Build

Pilot

Implement

Enhance

Digital

Transformation

FY2018

11

Continued Focus on Operating Expenses

» Discontinued Automatic Pay Raises for Store

Employees at 90 Days

» Refined Store Scheduling

» Adjusted Merit Pay Budget

» Adjusted Shift Differential Hours/Limit Shift Overlap

» Completed Pizza Delivery Actions and Enhanced

System for Ongoing Review

» 24 Hour Store Hours Adjustment and Enhanced

System for Ongoing Review

» New Fleet Management System

» Adjusted Merit Pay Budget

» Enhanced budgeted hours process to better align

with customer demand

» Continued evaluation of alternatives to optimize

distribution related to anticipated additional sales

volume

Cost Reduction Measures Operating Expenses at Unchanged Stores

% growth in store-level operating expenses

for open stores not impacted by recent growth programs

Implementation

Q4 FY2017

Q4 FY2017

Q1 FY2018

Q3 FY2018

Q3/Q4 FY2018 (for Fuel and Grocery)

Q4 FY2018

Q3 FY2018

Ongoing

4.5%

3.7%

5.7%

6.6%

4.2%

3.7%

FY2014 FY2015 FY2016 FY2017 FY2018 YTD FY2019

Q1 FY2019

Q2 FY2019

12

Disciplined Approach to Capital Allocation

» Anticipated tax reform benefits

» Reduced capital requirements for store upgrades

– Since FY2009, store base has been significantly

upgraded, addressing targeted locations

– Based on a holistic analysis of market and store

characteristics, future capital requirements for

replacements and remodels will be limited

Capital Allocation Priorities

» Invest in high return growth and profitability initiatives

– Digital Engagement

– Price Optimization

» Disciplined store growth

» Strategic acquisition opportunities

» Return capital to shareholders

Disciplined Approach to Capital

2%7%

21%26%

34%39%

45%

53%

61%

69%

0

200

400

600

800

1,000

1,200

1,400

1,600

FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18

Nu

mbe

r o

f S

tore

s

New Store Constructions Acquisitions

Replacements Major Remodels

% of Total Store Count

~69% of total stores have been

replaced, remodeled, acquired,

or newly constructed since FY09FY2019 Budget ($,MM)

New Store Construction & Acquisitions $ 318

Replacements 33

Maintenance 54

Transportation & Information Systems 61

Total Capital Expenditures $ 466

13

Disciplined Approach to Capital Allocation (cont’d)

Share Repurchases

Dividends

» Completed Initial $300 Million Authorization in May 2018

» New $300 Million Authorization Through FY2020

» 18 Consecutive Years of

Dividend Increases

» Board Approved a Quarterly

Dividend Increase to $0.29

Per Share at June 2018

Meeting

$0.72

$0.80

$0.88

$0.96

$1.04

FY2014 FY2015 FY2016 FY2017 FY2018

1,808

1,878

1,9311,978

2,073

2,123

FY2014 FY2015 FY2016 FY2017 FY2018 YTD FY2019

Store Growth

FY2014 FY2015 FY2016 FY2017 FY2018

YTD

FY2019

New

Builds44 45 51 48 85 41

Acquired

Stores28 36 5 22 26 13

» Current 2019 Guidance: 55-60 New Builds, 20+ Acquired Stores

Unit Growth by Year

14

World Class Board to Support Casey’s Strategy

Casey’s Recently Added High Quality Independent Directors

» Elected Independent Chairman

» Added 5 Highly Qualified Independent Directors

– 8 of 9 Directors are Independent

– 5 Female and 4 Male Directors

– Geographic Diversity Among Directors

– Average Director Tenure is Four Years

» Adopted Proxy Access

» Implemented Director Age Limit

» Implemented Director Tenure Limit

» Adopted Majority Voting in Director Elections

» Based on Recent Iowa Law Change will Begin a

Phased Declassification of the Board Starting in

2019

15

Prepared Food & Fountain Category

$659

$781

$881$953

$1,006

$764$820

FY2014 FY2015 FY2016 FY2017 FY2018 YTD 2018 YTD 2019

61.1%

59.7%

62.5%62.3%

61.0%

61.5%

62.2%


$403

$466

$550

$594$614

$470

$511


Revenue (in Millions) Gross Profit Dollars (in Millions)

Gross Profit Margin %

16

Grocery & Other Merchandise Category

$1,583

$1,795

$1,974$2,087

$2,184

$1,672$1,807


32.1% 32.1%

31.9%

31.5%

31.8%31.9%

32.2%


$508

$576

$629

$657

$694

$534

$583


Revenue (in Millions) Gross Profit Dollars (in Millions)

Gross Profit Margin %

17

Fuel Category

1,666

1,8171,952

2,0622,199

1,6661,750


16.1

19.3 19.618.4 18.5 19.2

20.8


$268

$351

$382 $378

$407

$320

$365


Gallons Sold (in Millions) Gross Profit Dollars (in Millions)

Gross Profit Margin (cents per gallon excl CC Fees)

18

Recent Sales and Margin Trends

Fiscal Year

Fuel

Gallons

Grocery &

Other

Merchandise

Prepared

Food &

Fountain

2014 3.1% 7.4% 11.8%

2015 2.6% 7.8% 12.4%

2016 3.0% 7.1% 8.4%

2017 2.1% 2.9% 4.8%

2018 2.3% 1.9% 1.7%

YTD 2019 (1.4%) 3.0% 1.8%

Current 2019

Guidance(2.0%) - (0.5)% 1.5% - 3.0% 1.5% - 3.5%

Same-Store Sales Average Margin

Fiscal Year

Fuel

Cents per

Gallon 1

Grocery &

Other

Merchandise

Prepared

Food &

Fountain

2014 16.1 32.1% 61.1%

2015 19.3 32.1% 59.7%

2016 19.6 31.9% 62.5%

2017 18.4 31.5% 62.3%

2018 18.5 31.8% 61.0%

YTD 2019 20.8 32.2% 62.2%

Current 2019

Guidance19.0 - 21.0 31.5% - 32.5% 60.5% - 62.5%

1 Fuel cents per gallon excluding credit card fees

19

Fuel Margins Trend Higher

9.9

11.5

10.210.6 10.5

9.8

11.1

9.6

10.9

10.1

10.7

11.5

10.4

13.9

12.9

13.9

15.2 15.1

14.4

16.1

19.319.6

18.418.5

20.8

8.0

10.0

12.0

14.0

16.0

18.0

20.0

22.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD2019

Ce

nts

Pe

r G

allo

n 1

Fiscal Year

1 Fuel cents per gallon excluding credit card fees

FY1995 through FY2007 Average ~10.5 CPG

Since FY2007 Annual

Margins Trending Higher

1

2

20

$365

$479

$560

$509

$486

$397

$457

2014 2015 2016 2017 2018 YTD 2018 YTD 2019

EBITDA & Diluted Earnings Per Share (EPS)

$3.26

$4.62

$5.73

$4.48

$3.81

$3.20

$4.83

2014 2015 2016 2017 2018* YTD 2018 YTD 2019

EBITDA (in Millions) Diluted EPS

* FY2018 figures exclude one-time benefit from Tax Cuts and Jobs Act

investor presentation · presentation is as of january 31, 2019 and january 31, 2018, respectively,...

Documents