Bob Espey, President & CEO, Announces Decision to Step Down Michael Jennings, Chair of the Board, Appointed as Executive Chair Provides Preliminary Q1 2025 Results Amidst Macroeconomic and Regulatory Volatility
CALGARY, AB, April 16, 2025 /PRNewswire/ - Parkland Corporation ("Parkland" or the "Company") today announced key management and business updates.
Parkland Corporation Logo (CNW Group/Parkland Corporation)
CEO Succession
Bob Espey has informed the Board of Directors that he will step down as President and Chief Executive Officer of Parkland.
"On behalf of the Board, I would like to thank Bob for his vision and leadership over the last fifteen years as President & CEO," said Michael Jennings, Executive Chair of Parkland. "Bob has led Parkland through a period of exponential growth, transforming the Company from a small regional fuel retailer into one of Canada's leading fuel and convenience retailers with international operations in twenty-six countries. We thank him for his unwavering commitment and dedication."
"Serving as Parkland's CEO has been the opportunity of a lifetime. I want to thank the entire Parkland team — past and present — for their incredible dedication and drive. I am proud of what we have built together," said Mr. Espey. "Over the past few months, it became clear that stepping down and announcing my departure may help bring resolution to the situation with Simpson Oil Limited and benefit all shareholders. I remain deeply committed to Parkland and will support a smooth transition to new leadership. I look forward to working closely with Michael in his new role as Executive Chair."
The Board of Directors has formed a CEO search committee (the "Search Committee") comprised of independent directors to oversee an extensive executive search process to select a qualified candidate to replace Mr. Espey. Mr. Espey's deep understanding of Parkland's operations will provide continuity during the search process. He will stay on until the appointment of a new CEO, the completion of the strategic review, or December 31, 2025, whichever occurs first.
Update to Board Responsibilities
Effective immediately, Michael Jennings is appointed Executive Chair. In addition to providing continued leadership to the Board, Mr. Jennings will remain focused on the governance and delivery of a disciplined strategic review process which is being led by a Special Committee of experienced directors, supported by Goldman Sachs Canada and BofA Securities.
The strategic review aims to identify opportunities to maximize shareholder value by evaluating the current business strategy and optimization opportunities, while also considering alternatives including asset divestments, acquisitions, transformative business combinations and a sale of the Company.
In line with best corporate governance practices, James Neate is appointed Lead Independent Director of the Board.
Q1 2025 Preliminary Results
Parkland has a diversified and resilient business. Its base business is well positioned and retains significant operational flexibility to navigate macroeconomic uncertainty on the horizon, which is impacting fuel demand and unit margins.
Recent regulatory developments in Canada and the United States have created volatility and intensified market disruptions. These are curtailing the profitability and movement of refined products into the United States and creating structural shifts in climate and carbon compliance programs.
For the first quarter of 2025, Parkland expects to deliver Adjusted EBITDA of approximately $375 million.
Canada expects to deliver Adjusted EBITDA of approximately $110 million. While our base fuel retailing, convenience and supply business performed in line with our expectations, the quarter was impacted by a commercial decision to wind down our Californian compliance market position1. While these markets have historically benefited our strategy, and been profitable, given the broader shift in the macro and regulatory environment listed above, we chose to fully exit our positions in the first quarter, resulting in a charge of approximately $55 million.
International expects to deliver Adjusted EBITDA of approximately $181 million. This reflects strong underlying commercial and wholesale performance, and continued strength in our South American region, as well as the translation impact of a strengthening U.S. dollar.
USA expects to deliver Adjusted EBITDA of approximately $16 million. We continue to see macro pressures impacting fuel and convenience demand in line with broader industry trends, as well as competitive market dynamics which are impacting unit margins. Furthermore, a core tenet of our U.S. strategy, which is capitalizing on supply arbitrage opportunities moving refined product between Canada and the U.S., has been impacted by the macro-economic and regulatory developments noted above.
Refining expects to deliver Adjusted EBITDA of approximately $79 million, which includes the successful completion of a three-week planned maintenance event. The refinery performed safely and reliably in the first quarter which allowed us to benefit from favourable market conditions.
The 2025 Adjusted EBITDA guidance of $1.8 billion to $2.1 billion was purposefully broad to reflect the potential impact of ongoing macroeconomic volatility. Based on current market conditions, Parkland now expects results to be toward the lower end of that range.
Parkland will release its first quarter 2025 results after market close on May 5, 2025. The Annual General Meeting of Shareholders will be held at 9:00 a.m. MT on May 6, 2025, in Calgary, Alberta.
The financial information contained in this release is preliminary, unaudited, and subject to change based on completion of the Company's quarter-end financial close process and final accounting review.
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1 These positions are held within our integrated Canadian logistics business, which is reported within the Canada segment.
About Parkland Corporation
Parkland is a leading international fuel distributor, marketer, and convenience retailer with safe and reliable operations in twenty-six countries across the Americas. Our retail network meets the fuel, and convenience needs of everyday consumers. Our commercial operations provide businesses with fuel to operate, complete projects and better serve their customers. In addition to meeting our customers' needs for essential fuels, Parkland provides a range of choices to help them lower their environmental impact, including manufacturing and blending renewable fuels, ultra-fast EV charging, a variety of solutions for carbon credits and renewables, and solar power. With approximately 4,000 retail and commercial locations across Canada, the United States, and the Caribbean region, we have developed supply, distribution, and trading capabilities to accelerate growth and business performance.
Our strategy is focused on two interconnected pillars: our Customer Advantage and our Supply Advantage. Through our Customer Advantage, we aim to be the first choice of our customers through our proprietary brands, differentiated offers, extensive network, competitive pricing, reliable service, and compelling loyalty program. Our Supply Advantage is based on achieving the lowest cost to serve among independent fuel marketers and distributors in the hard-to-serve markets in which we operate, through our well-positioned assets, significant scale, and deep supply and logistics capabilities. Our business is underpinned by our people and our values of safety, integrity, community, and respect, which are embedded across our organization.
Forward-Looking Statements
Certain statements contained herein constitute forward-looking information and statements (collectively, "forward-looking statements"). When used the words "expect", "will", "could", "would", "believe", "continue", "pursue" and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things: the expected first quarter 2025 consolidated Adjusted EBITDA of Parkland and the expected first quarter 2025 Adjusted EBITDA of each operating segment (each calculated consistently as set out in section 16.A. of the management's discussion and analysis for the quarter ended December 31, 2024, and note 26(a) to the consolidated financial statements for the year ended December 31, 2024, each dated March 5, 2025); Parkland's expectation of being within the lower end of the 2025 Adjusted EBITDA Guidance range of $1.8 to $2.1 billion; and Mr. Espey remaining President and CEO until the earlier of an appointment of a new CEO, the completion of the strategic review, or December 31, 2025.
These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligations to publicly update or revise any forward-looking statements except as required by securities laws. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks, assumptions and uncertainties including, but not limited to: Parkland's quarter-end financial close procedures; general economic, market and business conditions; regulatory changes; micro and macroeconomic trends and conditions, including increases in interest rates, inflation, imposition of tariffs and fluctuating commodity prices; Parkland's ability to execute its business strategy; the results of Parkland annual general meeting of shareholders; and any other factors, many of which are beyond the control of Parkland. See also the risks and uncertainties described under the headings "Cautionary Statement Regarding Forward-Looking Information" and "Risk Factors" in Parkland's current Annual Information Form, and under the headings "Forward-Looking Information" and "Risk Factors" in Parkland's Management's Discussion and Analysis for the most recently completed financial period, each as filed on SEDAR+ and available on Parkland's website at www.parkland.ca. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
