- Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and thank you for standing by. Welcome to the UGI Corporation Q4 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to of conference Investor like Morris, to now Director Senior Relations. would hand over the Tameka I Please go ahead.

Tameka Morris

Good morning, quarter fourth Corporation's fiscal everyone, and welcome earnings to call. UGI XXXX

CFO; President Joining the Gas, Natural entire results, be provide & Roger then CEO; me an Roger Procurement. Engineering Beard, available Perreault, team and your Ted today Ted Vice will are Global questions. Jastrzebski, to and and and Construction President, overview Bob Executive our and answer will of

reports factors you today's that for and statements, differ extensive remind events comments Actual are to Before today to to earnings predict. expectations. forward-looking release, we me our of uncertainties or could begin, most that may update certain statements our which that to difficult be recent assume Please include quarterly let Form risks results list are or an because on annual significantly no reasonable of reflect date results. circumstances our read report believes that management We affect forward-looking duty from our revise XX-Q as of only. different and

will to We measures comparable business describe available financial certain are our the within presentation. GAAP these of also measures. Reconciliations non-GAAP our measures using

Roger. I'll the over call Now, turn to

Roger Perreault

results session. for and our concluding with morning, several year-end discuss Tameka, financial review to our we'll key I question-and-answer earnings call, year, you've hope fiscal XXXX accomplishments the outlook release. that and had you, XXXX Thank good our a review XXXX the everyone. for all opportunity to fiscal On before today's

with start XXXX. fiscal let's Now

challenging and Marketing our GAAP our utilities on results, at to saw the pleased highest were history. macroeconomic and segment. in EPS businesses record we basis are regulated strong earnings non-GAAP and financial in our environment, Midstream which We report Despite a second

day fiscal headwind, marketing of electricity in European prices this impact geopolitical and mitigate a had range. variation I am and situation and the execute been helped Our significant of to their tirelessly extreme we Their within XR levels results. have LPG impact performance year. outstanding XXX investing infrastructure well to year's faced made and had an critical headwinds management, AmeriGas Without dedicated But rebalance our invest at worked would $XXX renewables on more well utilities focus to capital a reliable Gas continued is robust. expense in the this roughly deliver record our commitment, in key our of on some as replaced regulated across outlook for and level every business, XXXX customers our gas the distribution and and the across important in million our investment highlight replace business. utilities capital, and the systems. as deployed the year, progress Ted control our pipeline, We have natural marketing is we which growth, we This upgrade we've to at proud margin miles strategy, our our will who results. energy employees operations. strong to I'd communities energy against like of In financial UGI deployed culminated this our capital and serving in of original as and portfolio. strong provide first, Natural gas and Europe each European International business results. our The guidance and accomplishments on record our details

We earnings growth. expect profile, driving continue reliable a investment to similar

of opportunities between increasing are Pennsylvania, our in continuing prices homes new also record XX,XXX growth. track mains Utilities more Also, within for as added well strong oil gas the annual customer customer XXX with customers, commercial spread growth. than residential continued there as gas and Our heating XXX,XXX-plus business of and attractive a feet

of of rates in another that million case of year-end, and XX increase gas received in October year fiscal went included this on we our Pennsylvania rate base $XX base million two of $XX.XX million at an $XX.XX October effect into in phases, that approval Next, increase XXXX.

normalization at rider XXXX. beginning PA November utility We implement in are our also received to to pleased approval gas a adjustment have weather

relief commercial bills For for small bills our more and customers, gas than PA the the overall. weather weather average. and heating or adjustment residential cold from provides the season surcharge credit severely in X% as deviates applied is The to adjustment bill stable XX-year more when months provides monthly a during

as will in large weather segment now of earnings earnings. protected portion generate Going margin more reliable have forward, is of objective our to a our Utility support predictable our

saw PA fiscal warmer instance, X% than For utility our normal. in weather approximately was that XXXX,

and remaining well, of normalization incremental interest as an we investments in an Appalachian the to expanded interest These as acquisition year in had With The strengthened the pleased now tenant. well acquisition Moraine are basin adjustment, team with performed tremendous as natural volumes Stonehenge, EPS. of referred and XXXX important been the our gas the weather position as January we We with $X.XX our operator. systems a strong as midstream production the this midstream our East year. the in would during gathering marketing of fiscal have UGI

generated to XX% amount take-or-pays and commitments. We from volume with fee-based also a income realize of significant margin roughly of the continue in this minimum arrangements, margin fee-based from segment including

commodity year in higher International's year unit prior with to global volatility amidst LPG than a business. despite and had weather. volume the in business increasing UGI warmer modest an costs Moving excellent margins LPG increase

ACE compared new in is arise. of AmeriGas, volumes account may positioned Our national well LPG advantage remains pre-pandemic and Europe take we when and saw to strong business to At opportunities levels. that strong volumes sustained

We now the delivery in also offered service, U.S. home our cities to Cynch XX cylinder in expand continued

where at $XXX experienced benefits XXXX. XXXX of total and impact million transformation the annual fiscal at million and These our mitigate inflationary we that concluded Lastly, AmeriGas during to environment €XX fiscal helped benefits of International. approximately cost achieved the we initiatives business XXXX UGI

Turning to renewable our advancing our progress in strategy.

our strategic to commitment million the over several with bio gas partnerships entered intent total to into LPG, renewables natural renewable $XXX year, we to During the produce fiscal date. bringing and

additional Our produce natural cubic to approximately operational, at New September XX. York and gas XX, of The pipeline cubic was credits this that million sold RNG renewable on to produce XR Spruce Once September Farm we XX project expect by will RNG strategy. Haven projects roughly in to into commissioned gas fully feet initial that will of support was made strides and We will our a to commitments be to environmental subsidiary, by natural with an environmental Idaho renewables commissioned marketed project, we The GHI other Energy. forward and feet important be have and also interest, investments RNG facility our look credit minority these annually. the GHI the is be XXX Energy. utility, local expected separately on a renewable which interstate sold million similar in marketed RNG

commitments we all important in We've ESG Lastly, of pleased initiative. our on to progress inclusion, June, in report Transparency, by our issue fourth our made annual were equity diversity belonging, against ESG advancing and Progress. Action and entitled: and

in As we of our our across in and these part investment groups footprint. expanded employee XXXX, sustained women's efforts, resource fiscal network our global impact

We Human Sisters Big as United Way, also Organization. The Library the with our continued organizations and Brothers Big such partnerships

we crisis food were In funds organization, Kitchen, the assist Central refugees and from of stemming Ukranian to addition, the Russia's The non-profit humanitarian for Ukraine, global of with all honored World a the these by of with as to partner Basin communities employees as supplies performed challenges, to well proud who With their admirably serve. and in that fuel kitchens. food our am the propane we workplace I and have in providing

Ted our Now, to I'll financial results. through turn walk the to call over

Ted Jastrzebski

Roger. Thanks,

prior and diluted adjusted of UGI in EPS diluted the XXXX for the delivered EPS mentioned, our after provides and As reconciliation result of Roger slide which $X.XX, year. a fiscal second GAAP fiscal This highest XXXX. a record adjusted was

our totaling to $X.XX exclude items. of adjustments, you earnings As adjusted related a see, diluted number can

prior to the natural the Pennant, which system interest for First, the impairment changes for a quarter. assets, mark-to-market Services the in in year gathering $X.XX derivative the with impact a functions on the prior $X.XX other hedging $X.XX fiscal initiatives. gas the comparison transformation fiscal UGI currency third all expenses gain primarily foreign year. membership in $X.XX instruments commodity XX% XXXX. $X.XX versus instruments, a transformation of in gain versus of through in related corporate $X.XX to associated had for Energy of $X.XX a of business of Adjustment in to

had I'll continued at natural the business on in businesses, costs. prices we largely of deferred on of loss we to and reduce $X.XX Pennsylvania the enacted net year-over-year segment in to LPG International AmeriGas at Company's unprecedented marketing for liabilities. extinguishment gas of We a net to the expenses state's Europe. costs, Next, the $X.XX $XX the had focus recorded of in and a are future tax based tax expense associated provide was additional control power partially on a a which with on of loss workforce analysis management $X.XX shortly, restructuring in QX offset attributable global by each in debt UGI refinancing slide, on volume actions a at and tax net reduction margin tax with in reversals related in QX, legislation associated which benefit segment. the the there rate. but this being of million the volatility income speak in related and color drivers level, resulted corporate to in a fiscal XXXX high benefit the On effect and energy legislation The performance

the by As mentioned results driven from UGI reduction in energy the lower previously, marketing. was International's EBIT

increases reported margins Our customer replacement that capital, gathering or increased income our and DSIC system from improvement UGI and deployment driven natural gas margin Mountaineer, gas record in of incremental at segment. by results from Midstream Utilities charge, distribution growth were and Marketing largely stellar businesses the in betterment solid

million pandemic as margin $XXX total million as This debt versus was effect rising lower pickup to telecommunication modest crop year of partially EBIT reduced the inflationary over Retail fuel a rightsized negatively lower we reported increases and the higher recovery tail and of $XX volume in warmer. EBIT advertising compensation partially million, result higher workforce due last This of million continued a challenges, by reserves Retail despite volume, $XXX lower as drying marketing of International benefits significantly recovery declined retail vehicle a reflecting compared expenses inflation UGI $XX the lease in offset from by declined and $XXX partially by as and X%, year our the tank to average as and increased key auto positions higher were volumes that margin. increased had rental as of resulting the from well reported roughly claims total and from effect prior higher retail were gas prior the of and largely on the $XXX pressures LPG well and delivery-related costs. as effects energy of energy year's million offset to employee margin, fuel individual increases the unit margin, currencies cost conservation COVID-XX business. businesses. favorable well marketing of the the bad campaigns. the and staffing expenses. in service to impact were and cost environment. foreign retail volumes LPG the that to the and uptick in in headwinds as Total administrative $XXX margin offset primarily Turning customer decline was partially million certain million shortages LPG was fees. prior and by of as These efforts million due volumes business commodity by $XXX margins higher by year, Operating weather AmeriGas weaker effect offset bulk insurance by impacted vehicle and inflation. X%

LPG the business. at first Looking

$XX Operating the and Europe. due costs. the down increase offset to there inflationary volume Northwest a due were total an personnel distribution, pressures with XX% on mentioned, in unit propane in average of higher margins largely average impact in environment in weaker million higher effect LPG I and As administrative even euro, was to an increase cost of by LPG the margin maintenance expenses and

UGI Marketing business. Turning to International's Energy

and shortly. purchases this to to decision Energy marketing, European $XX increased balancing led from seen, Marketing to energy As cost. of had the of and resulted pursue will the provide from Year-over-year, unprecedented million EBIT market an higher costs and was update XXXX which which decline a review we've the Roger primarily spot pressures on attributable margin to strategic the business, volatility, fiscal

of year this business. several aspects Stonehenge last legal total came Next, natural the of the & from incremental January East, record in Marketing due million, over from Midstream uptick higher activities, the EBIT holding renewable year. gas million $XXX acquired assets from of had earnings natural XX% activities gas in increased to and The UGI entity up marketing margin Moraine contributions $XX

peaking in increase we extracted volume, which a largely the store multiyear million reverse driven was contracts hedge gas and from $XX and the this includes capacity timing marketing when First, by to during the million The $XX upcoming certain activities, expected of winter. storage management for from had management. for capacity increase settlement is and gas is

Next, East, pricing million which from gas higher the incremental $X $XX and natural for higher from impact retail in activities, UGI average RINs LCFS power million includes million and credits $X and in Moraine margin generation margin. of renewable

the Mountaineer, strong portfolio. year, result operating performance service largely expense UGI in derivative delivery also of which The in has XXXX. Mountaineer, was tremendous $XXX Mountaineer. affected At been acquired increase in part expenses This fiscal year. the available from mainly by of admin higher the of DSIC exceeded Liquidity. of EBIT million, customers. cash of depreciation continued incremental and strengthened for segment growth the a for as We've It counterparties. received benefits $XXX end in to than with had was and September and and earnings Our a expenses collateral the with were increase billion, large $X.X year from incremental had delighted Utility residential as our was liquidity our the diversified million fiscal well XX% the which prior mechanism expectations of attributable the

call UGI's Roger. to that, strong balance Our the with turn supports I'll disciplined attractive cash And back generation approach. investment and sheet

Roger Perreault

Ted. Thanks

the teams communities to commercial committed we the efficiencies to UGI proud am the would serving identifying faced. to challenges our Before of operational safe of strong beyond, I our fiscal XXXX and performance in maintaining macroeconomic we supporting fiscal reiterate like XXXX we have pivot and customers, despite the operations, and that serve. of been I well-being how

an the XX business, X.X%. years long-term of of a base strong targets for record CAGR of led balance XXX underlying foundation dividends increasing CAGR paying dividend solid a in sheet attractive a X.X% This past flexibility has and dividends have enables financial to delivering EPS We investments. that XX-year and the financial our and growth consecutively with on years, track

few our years, natural last our in the Over rebalance distribution shared to an to we from to LPG. portfolio and gas renewables even comparison intent global

is along gas several rebalanced headwinds prices, rising this natural led from slide, we facing global conversation businesses. move you reduced that this a challenges. chain no LPG contribution, our we'll both is the And commodity driven the with a inflation, As shortages doubt now, supply world by from such year, as to fiscal can that see to record and attained portfolio in XXXX. performance higher obstacles There business our labor earnings

conditions will these that expect continue fiscal into We XXXX.

on we U.S. essential the optimize value higher that controlling appropriate. diversification have passing to resilient earnings one a Europe, providing our base as along so both to I confident stream. a And solutions supplies and shareholder geographic energy large we always, in as working differentiated customer that costs and am are well costs positioned we to and portfolio, where are

in with XXXX operational managing we economic discipline our history, efficiencies, fiscal As expenses has this diversification, our and proven coupled our to and driving in throughout ability margins, manage controlling through cycles. challenging saw when

our unchanged priorities evolving services. return, will would and of for investments In growth that and years, ESG transformation weather and execute strategic to portfolio, you the and detail, XR spend advance each market XXXX. needs. continuously on sustainable as strategy at expand optionality strategic build journey cycles. safety for create like business, our to: to us Energy our thrilled reliable to customer our renewables high to constructive I EPS At European drive across we addition, of reliability a the focus to share with With supply at level, coming and backdrop, at speak achieve economic greater with to these our even attractive shareholders regulatory resiliency is over functions in on value provides be robust earnings priorities through fiscal of capital the ignite execute are best-in-class continue AmeriGas I and and more operate environments core, support network that utilities improve enabling meet rates review distribution pipeline we but in to normalization, flexibility, Marketing share support growth our the and our will

continue Now let's Netherlands U.K. wind Belgium, the start At European XXXX. are with we France entering XXXX. marketed October, of termination the the XXXX, beginning UGI quarter take of customers projected assumptions, plan, to and electricity contracts in Separately, third in sell including countries: in strategic the volumes early for more negotiations to and the Belgium the teams fiscal and have initiated with and fiscal four running in their for natural from to fiscal of two expected Stemming the the operations European the to Energy gas operate and operational or earnings remaining the XXXX contracted favorable down divested situation. terms U.K. Netherlands Marketing all of to our actions impact, France, in we Using that business. the we impact of our the through volumes we conditions, fiscal business mitigate to geopolitical review intend if given businesses quarter, first provided and The first and XXXX. with goes our in located into those quarter International

Moving strategy growth to our at AmeriGas.

we self-service sales business, benefits new consistency and transformation the which routing of business provided customer completed additional a within such business As critical digital processes, LPG some centralization global and mentioned channels, platform, noticeable earlier, the we logistics. as including

had operational the financial we way, which along benefits, as some clear also some customers. stumbles were While there impacted mentioned, previously

the customer This are and we enhance making result, growth. improvements growth is strategy and operational focused drive experience on a two-pronged. to strategic As

enhanced our center exceptional we've hiring in amongst effective XXXX, model and others. further leveraging retention, processes, scale create First, routes fiscal elevating we call experience customer the related improvements delivery and we since realign challenges to experiences, improvements to more meaningful optimization the while telemetry, enhanced in experienced the KPIs, to drive determined made operating through customer programs of and are

In on markets while our grow of demonstrated margins, competitive the history track we we optimizing retention effectively to that continue a and managing by the intend over focusing record to years, operate in pricing we strategies customer addition, where and have margin, satisfaction.

engaging Secondly, acquisitions. strategic in key

synergies Our our intent approach from great acquire planning service density integrate with companies, expected greater margin are expansion horizon. market and realize to that actions and aligned drive is our benefits over are of to our These growth share the strategic capture territories.

a the independent you propane As hold this We retailers exclusive EPS market, XXXX. X,XXX aggregate we the and leading X/X distributor by of market than in fragmented but the a close U.S., to share, with highly more by gain are to volumes grow and are roughly in higher national of X% aware, market increase is intend retailers. fiscal regional who

addition, while of in In is keeping AmeriGas intent leverage targeted the at ratio mind to to X.Xx. Xx leverage long-term our reduce

a We a record regulatory reliability growth, a growth. miles long deploy have Utilities. XX,XXX runway in to With capital. of great West and and track of Virginia the attractive pipeline infrastructure opportunities to in customer Pennsylvania both of constructive modernization we environments and safety, operate Next, of promote support that over

investing replacement. the infrastructure years $X.X business demonstrate our next to over Our invest the commitment and in plans four to billion approximately

effectively. Our team record capital, safely deploy to continues both and of amounts

is less attractive of these incurred investments, the regulatory we in at rates with approximately XX% recover of return. XX minimal months there as lag addition, than In costs

earnings support we energy slide. lower intensity will on intend delivering investing to next commitment fiscal in carbon to Investing the solutions XXXX, On objective further our while customers. growth In our of to providing reliable renewables. renewables in progress

energy the this Starting are a ether, $XXX gas years. investments new renewables pursuing of of ESG a of given gas areas, And excited projects focus dimethyl renewable renewable have U.S. of several our for renewable the is over to the in service progress natural in including XXXX, sustained integrity years, in few cadence commitment these the we lowers we producing overall number investments RNG RNG, renewable in projects made and us. steady over and enhances are improve we Since our beginning fiscal fiscal among and over We primarily projects, key at in methane bring placing Bio-LPG, earmarked strategic year, those in this have next million online, safety. emissions, made that system greenhouse core past infrastructure several measurable strategy. we

processes our continue In addition, of quality to the the we and of communities invest to customers technology we in people, employees, serve. life and enhance

of with our be sustainability progress established report intent targets. fiscal fourth the we TCFD ESG disclosures made A with on stakeholders force highlighted goals climate-related further our issued financial first June and Our commitments, will insight a XXXX in emphasis into providing aligned the climate against for summary of advancing previously to annual release XXXX key report. task our goals greater

in Ted the with the continued our now, longer-term pleased sustainability tremendous journey our well our financial are We to the as XXXX as program. of And ESG advancement guidance committed outlook. fiscal will progress and are discuss

Ted Jastrzebski

fiscal Thanks, Yesterday, fiscal This normal adjusted $X.XX the announced quarter range a XXXX. Energy XXXX guidance current we of selling EPS tax range the business $X.XX. weather of in the on French regime for average, guidance first XX-year our and based Marketing to assumes Roger.

Netherlands. broader As with to are commodity you the because impact historical of a energy businesses and the the Belgium the seeing potential guidance using and our for uncertainties in range approach remaining see, volatility can we're price than inflation, we the marketing

a adjusted slide, fiscal to the see the $X.XX. EPS you'll On of midpoint the of of XXXX of our guidance comparison $X XXXX fiscal

from storage First, sales from International. to at due impacted we items. gas $X.XX and including is $X.XX onetime certain fiscal winter items, the had were several One, in capacity upcoming another XXXX's when are non-recurring that benefit to results management reverse the UGI margins extracted expected by asset

next a are call out items few to the there Next, for notable year.

in Energy operations estimated XXXX winding first fiscal Netherlands. divesting in in we headwinds from curves. Belgium volume and down quarter reductions latest $X.XX Marketing of of forward the the As the assumes anticipated International, reduced and discussed, Roger at France expect UGI reduction The the given

base the increased the $X.XX rates capital from a pickup the case was typically manage seasonal debt higher of that Next working given and needs. $X.XX approved that to gas used is expense short-term end year interest rate at on headwind to from

have strategic Roger are benefits from an as includes provide that as which the fiscal return Lastly, drivers, priorities to to incremental normal we discussed $X.XX This other well expected over the XXXX. weather into across our service guidance, impact compensation inflation, also sustained territories. which expenses, we've fuel, charges. taken our affected In consideration and maintenance vehicle among other the establishing benefits, has of employee

We expect that and management these a continue of mitigate impact challenges. expense disciplined approach will the global to us margin help to

discuss Next, outlook. to I'd briefly like longer-term our

While a and we Energy business shifts European as exit key our AmeriGas increase ability are in at continue address value. we year foundational view XXXX some fiscal we the resiliency Marketing to and the our with to confident strategic of growth business, shareholder as

projects our are: X% of while achieving EPS billion for the $X.X the financial replacement down for from mentioned Marketing sale base strong fiscal commitment. as that unchanged. rates primary business regulated XXXX our earnings period our of operational share also new based attractive which plan XXXX XX% we in actions new on over AmeriGas the approximately Act. The disciplined long-term rates; outlook Reduction and the allocation to activity; in investment anticipated strategic through need renewables fiscal for alignment capital CAGR to business; in the at growth the four-year flow tax with credits Inflation earlier; increased drivers Energy betterment On by wind our will and fiscal the Roger XXXX fiscal roughly we in and to drive return; years X% For EPS M&A anticipate the European for the of XXXX, cash continue XXXX, adjusted planned per grow earnings to utilities, that modest increase will sustainable is coming from in and pipeline invest our

competitive generate debt to to will meet cash, and walks across billion growth dividend with while we This this $X stable between midpoints, $X.X and $X.X M&A the million will $X.X investments the to business, in billion new is growth, approximately roughly normal shareholder billion expected you billion Using how capital used billion other coupled targeted to XXXX $XXX commitment deploy expect $X.X which deliver to utilities ratio, capital support combined businesses, expect maintenance payout We returns. slide totaled with our fiscal $X.X maintaining billion strategic through and XXXX. of regulated in the investments. be on investments our which $X when a billion, for to

On the expect right, allocate M&A growth, how we capital see you period. another regulatory view and plan of the the over to

strong We EPS the market hedged rate we to end look rates remain we strategy. us via in expect was balance both flexibility and execute capital XX% acquisitions debt XX% and in At to rates us effectively XX% will of leave helping LPG fiscal fixed at as on at maintain value XXXX, the business invested the a liquidity to AmeriGas look fixed of over swaps. global and with sheet, Natural to When basis, at invest in Gas growth. be businesses, interest the our long-term of primarily shareholders. our at this drive overall for consolidated our renewables, are and roughly overall, a share And more than in rebalanced portfolio create sustainable

have no maturities in we addition, material protection providing In fiscal interest debt until a XXXX, rate rising environment.

Lastly, I'll call X.Xx. consistent the back to And to debt through now, year-end the mind hand for 'XX has we period, we targeted while down of Roger. in pay 'XX 'XX. leverage Xx move to leverage ratio as ratio our keeping And plan fiscal been and and our fairly expect

Roger Perreault

Thank you, Ted.

I beginning As call, at results I of the the stated am year. the pleased with for our solid

record. with I for our leaning a business and growth, strategic positioned that platform in XXXX as consistent discussed I where confident am we that the priorities strengthening uncertainties this While there are and climate, will be view are proven into we I well fiscal earlier. resilient year our track

confident I and reliable LPG. marketing, are regulated in that Over given midstream investments we continue are the delivering we am making long well utilities, to term, positioned global our the growth earnings that and foundation renewables and our

which UGI your opportunities, call. your us strong in investment earnings have today's of Thank confidence interest for you We years. attractive in a gives in participation growth future and robust to deliver pipeline

Now, questions. we'll open the line for your

Operator

question [Operator first of And America. come Bank Instructions] Aiello of our from will Angelique

open. is line Your

Julien Dumoulin-Smith

thinking actually how a the on for side know propane the here that to in about domestic see on past trends? little some up my just pick How If Julien the I post-COVID, It's between volume. on we talked business on you evolving? we've side Can price I cetera. talk AmeriGas? you and just behalf tension the And about bit done Obviously, you here, about team. Again, of et times the nicely reversals, talked volume of do the about first. at are may,

Just can considering expectations, little look in expectations onwards, especially the just quarter? already you more if bit you you've latest seen at a here volume and what say 'XX around on

Roger Perreault

Thank to you Yes, few a I that like would quite your question. certainly items for highlight.

market with of XX% First that at operating When that the that continued all, our time, in you pops. calling are drive model of opportunities in now able trends on earnings improvement absolutely we've we growth operating have been We've the several currently in With ability our to they're moms look the issues engine also area calls, on an the different we've improvement continued to many share, last their a seeing answer at when operating is we their with and the market to that our described been we see quickly -- about seen growth, talked in, new metrics. delivering have. Julien, customers several XX% served When continued our able improvement. serve as specifically, or metrics. we've look times, we

good have of also able we've potential a attribute the in customer We've our we of churn. which stabilizing. of that results said, we model. also get seen to we the are with and new to to So, pains seen really ability operating base, We continued when out being in higher degree see deployed That had leaving, some customers we front teething bring customers. seen we that

routing enabling sure What us optimization been hiring making efficiencies. So getting it that really we see doing around. starting for deliver to drivers turn pushing address everything is to and from to time, in our we've we're overall drivers, on trucks,

when customers we really us come We example, of served just don't customer digital at for are us and very significantly with experience, you around adding can a market capability. to operations And the where from differently electronically. today that that they interact They of deal in all they a that same large better where application have leading a percentage than can when with customers look product. digital where and can that enhanced tools is pops, our need with forecast telemetry, have moms --

year as to where 'XX now see 'XX coming I and nicely, foundational absolutely of these going a year. now expect beyond. all we are into forward It's nice pieces see together So a and trends some

Julien Dumoulin-Smith

ability reflected in think I and I and about too? to side, talking reflected terms to instance, back can, you in measures And I of sort into well coming you're headwind? will, altogether on also that se. some been time. of on of 'XX year for here. about sensitivities of you for about the that? about you what what's know earnings source you provided just efforts doing levers may, descaling Europe, how 'XX the cost as cost impacts if But a continue about you talk Is mitigating preparation the I to the that per have strategic here, much cost not integration, if in is Again, and those the as guys obviously, out sort but mean, 'XX as beyond just of Can throughout talking talking

Roger Perreault

Yes.

couple well a a to the as more your maybe to of comments Julien, So energy formulate I'll little in here. question cost, answer marketing talk and about Europe, on

dug also we and filling specific So towards year 'XX of inflations includes that we those open to where which because And It made in where a 'XX no guidance some very a sure of a we views and focused that year discretionary control the cost, experience on 'XX, open definitely in our deep expenses. absolutely was same of inflation. are the while positions we positions, there's at kept a when absolutely our doubt specific areas. time. have was seen on time, we're look And year we delivering customer our it's for promise, open period

must into all bit and it's strategy across getting built known certainly conversation marketing. that to I populations, think energy move America be part drivers that's that North driver guidance. example, of the that little very drivers, our well you're population, fiscal that If retaining a and For ensuring 'XX a competitively I paying

sale dependent uplift You our saw in the cut the be that going on first last to like and it see wind But continue which hit. this business that's France, from to in Netherlands concluding significant year, and something it half in And we was then down a hit in pretty to done prior year. we be the the expect And quarter. a the year, to looks we basically $X.XX expect that's in Belgium. that we're

our portfolio, So we is to our about as we of have energy resigning continue diminish because volume contracts. to prior, marketing going been not clearly, talked

them also to to engaging to risk We continuing come natural with are letting conclusion, customers the that is contracts these ensure profile serve their while of balanced.

If volumes, what Now, excess ability that focused we are for go And we very we've really are going as forward. looking cetera, take. on. they excess those volume we et efforts charge need they take volume, been at to to that are an

elements So just that factoring range of in guidance I when you about. at it's 'XX, fiscal look talked our these

Operator

Solecitto One Barclays. moment our comes and question from Marc next of

line is Your open.

Marc Solecitto

Marketing French with Maybe sales start Energy expected you quick the and side a one. I curious about just proceeds if U.K. in talk the was to cash could to businesses.

Roger Perreault

thank Mark, you.

I'll it to question, that Ted. For over hand

Ted Jastrzebski

question? the Sorry, repeat Mark, could you

Marc Solecitto

to sales Just French what the U.K. of energy businesses? cash proceeds the expected are the marketing tied and

Ted Jastrzebski

have books we of we that motivated I shared Yes. we won't say until be to that get businesses down. out will quarter. the to the or the were move with close sharing first towards either on -- wind very We these much as details

is write-downs large reminder, those those we're just contracts do our fairly that it to positions, those write-downs out out to figures neutral dramatic What not And so, see positions. And see on the moving of is established when a a have that be of are you us. to -- cover the derivative going derivatives is cover for of these as business. cost that you businesses are at we we derivatives going that

fairly so, hurts as that on it's what contracts seeing we're to the business. a -- in And fair offset that it's exist

close the and first the that be will we provide on of actual results the we'll So, sale. year, final those showing quarter as figures we

Marc Solecitto

international Got contracts the the that it. volumes, Understood. And then XX into your hedged if outlined we exposure Slide at you be energy there? have more full you And have volumetric requirement marketing could there exposure remaining? in look

Roger Perreault

Yes.

sensitive certain, can't for in portfolio those hedged is to very less being Europe answer hedged, very be we've the they we consumption. think XX%, rules European product seeing as being in the question, that the the do customers right? reduce What to product, what I for off contracts remaining the Marc. the expect I are we be -- us are so solid amount see customers That the the said, actually portfolio, story. again, to the I hanging to like that customers where We like. in we're expect kick strong we're fixed fact, me take. a over this Belgium. There going Netherlands of there's in are that said, take at bit to Let look are case. right? consumption described so. price We XX% but encouragement So have that a encouraging previously, positions -- volume of these be today and governments over with customers here specific very to I unknown that customer will, really similar will That is no there's hedged Europe mandating an a have be and do

we serve enterprises. just you small, medium on some give primarily Now insight to our we customers serve,

these with establishments enterprises serving we that conversations. we're So customers are whom other like medium-type having are schools and

having consumption profile to could then costs. them course, And volume, of that that engaging expecting the And they we discussion them, that understand more look could if on what where ensuring would a less commercial be their conversations really expected more we're to customers. take passing are they understand to cost are, take like, on We with volume. there to are with recognizes have possible, additional we them be from

Marc Solecitto

margin CAGR X% AmeriGas does EPS And onion capital it to to as be to the through a versus lastly, to recovery? or the maybe CAGR assumptions XXXX, to M&A? would that at peel target bit relates back then any related the embedded target? in EPS And incur your what the get you could require bake costs expected And that maybe volume X% around

Roger Perreault

Yes.

like the things of of We It's that to few you've organic things many growth. are a So, described, expecting combination right? highlight. I'd a

to the will diminish period. we So, succeed and during that we ensuring continues churn the are at expecting customer

focused effective always on are We margin management.

into propane but on we're experience, investments customer made apply fact to now We're centrally. space. medium-sized now course, from with being small, in operate our the about center the be -- couple of improve effective the redesigning cost able how what to costs also Now centralized that base margins think more model, very center. that's country very way acquisitions. service to a these in distribution customer the to do we expect management, efficiently handle we AmeriGas synergies of talked a going able able significant to synergies new say the years addition reengaging when again, And product increases, country What excitement operates do for to when the around us. as that trucks model to in and the we post to I we and, very how to to which into to that's our some margin be manage and able when where include much a service acquisition customer a We've our we centralized we've bring see more surgical across inflation We're tremendous operating with attractive going companies acquisition is well. customer are We're overall. from we these pass based of bases calls be of across through model, invested that, centralized route

the I So, excited blending time, the organic three all to about improvements churn, that the customer continue we're acquisitions. in we're where some described see growth of same combination going in areas while to at

the our during be of more are to blow deploying quarterly we're -- to course, on continue capital earnings, going that specifically this this, talk the we to acquisitions. able to As around build to we

Operator

Instructions] for CEO, like President remarks. would showing I questions. now closing the conference over to further turn [Operator And no and I'm Roger Perreault, to

Roger Perreault

all of up a to listening look great We would also course, weeks in forward today Thanks, the excellent I following to everyone. coming investor like Well, thank and meetings you earnings and, for next wish call. everybody happy to the weekend Thanksgiving. and in our into questions. call our at for

Operator

for you This conference call. Thank today's participating. concludes

disconnect. now may You

UGI (UGI) 18 Nov 222022 Q4 Earnings call transcript