CA - Superior Plus Corp. (SUUIF) Q4 2022 Earnings Call Transcript
Superior Plus Corp. (SUUIF)
Q4 2022 Results Conference Call
February 17, 2023 10:30 AM ET
Company Participants
Rob Dorran - Vice President, Capital Markets
Luc Desjardins - President & Chief Executive Officer
Beth Summers - Executive Vice President & Chief Financial Officer
Darren Hribar - Senior VP & Chief Legal Officer
Conference Call Participants
Ben Isaacson - Scotiabank
Gary Ho - Desjardins
Nelson Ng - RBC
Steven Hansen - Raymond James
Presentation
Operator
Good day, and thank you for standing by. Welcome to the Superior Plus 2022 Fourth Quarter and Full Year Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there’ll be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded.
I would now like to the conference over to your speaker today, Rob Dorran, Vice President of Capital Markets. Please go ahead.
Rob Dorran
Thank you, Victor. Good morning, everyone, and welcome to Superior Plus conference call and webcast to review our 2022 annual and fourth quarter results. On the call today from Superior Plus are Luc Desjardins, President and CEO; Beth Summers, Executive VP and CFO; and Darren Hribar, Senior Vice President and Chief Legal Officer. For this morning's call, Luc and Beth will begin with their prepared remarks, and then we will open up the call for questions.
Listeners are reminded that some of the comments made today may be forward-looking in nature and are based on Superior's current expectations, estimates, judgments, projections and risks. Further, some of the information provided refers to non-GAAP measures. Please refer to Superior's continuous disclosure documents available on SEDAR and Superior's website yesterday for further details.
Dollar amounts discussed on today's call are expressed in Canadian dollars unless otherwise noted. I'll now turn the call over to Luc.
Luc Desjardins
Well, thank you, Rob, and good morning, everyone. Thanks for joining the call to discuss our 2022 annual and fourth quarter results. I'm pleased to say we've achieved a record fourth quarter, posting adjusted EBITDA of $182.6 million. We also achieved full year adjusted EBITDA of $449.8 million, which was $51.4 million increase from the 2021 and above the midpoint of our 2022 adjusted EBITDA guidance range.
I'm so proud of the Superior team and their ability to achieve these results and unprecedented year that saw challenges related to the continued public health restrictions earlier this year, rising inflation and labor costs and a volatile commodity pricing environment.
Our financial and operational results are a testament of our resilient business model in the propane distribution businesses, and our superior way forward strategic initiatives, which saw us closed eight acquisitions in 2022 for a total of $519 million and announced a transformative acquisition of Certarus.
The eight-propane acquisition were complete 2022 were geographically diverse, include business in U.S., Northeast, Southeast, Upper Midwest and in California, and we also had one small acquisition in Ontario, Canada. In March 2022, we closed the acquisition of Kamps and Kiva, which provide us with a platform for future growth in the attractive California, Western U.S. market.
The acquisition completed in 2022, increased our customer base in the U.S. and Canada, and we expect to generate significant synergy from these acquisitions consistent with our historical experience of improving propane distribution business we acquire. So maybe I'm repeating myself a little bit here, but over 20 deals, and each of those 20 companies we've acquired have improved the bottom line by 25%.
So, the Certarus acquisition announced in December 2022 has the complementary high growth, low carbon fuels, Compressed Natural Gas, Renewable Natural Gas and Hydrogen to superior extensive distribution platform. To the use of mobile storage unit, MSU, Certarus delivers low cost and low carbon intensity energy alternative to its customer. Certarus MSU are interchangeable between CNG, RNG, Hydrogen giving Certarus flexibility to service its customers across North America as they transition away from diesel and other distilled.
Certarus provides a virtual pipeline to its customer that do not have infrastructure in place or required backup to support existing infrastructure. From 2020 to 2022, Certarus has more than doubled its adjusted EBITDA, driven by continued volume and efficiency improvement and the benefits from diversification to their end use customer segments.
I'm also happy to share that Certarus and its best month in December 2022, only to be surpassed by another record month in January 2023. The Certarus business is starting the year well and we expect they will achieve adjusted EBITDA in the range of $140 million to $150 million during the year 2023. The shareholders of Certarus have voted in favor of our acquisition of Certarus. So, there is no fiduciary out related to the deal, and we are only awaiting regulatory approval in Canada.
In the U.S., the 30 days of waiting period required under HSR filing has expired. So, we are only waiting for the regulatory approval in Canada. But more important, while we are awaiting approval from the Canadian regulator, all economic benefits being generated by Certarus business is accruing to us. We are including the full year results of the Certarus business, and our 2023 adjusted EBITDA guidance range of $585 million to $635 million because the cash raised in the business is ours based on their terms and the arrangement agreement.
We're excited to welcome the experienced Certarus management team and to the Superior family and to continue to grow the combined companies after close. Certarus is a high-growth business. We expect to generate attractive financial return, including double-digit accretion to Superior distributable cash flow per share in 2023.
Superior expects to achieve $1.9 billion acquisition target at the close of the Certarus acquisition, which is three years ahead of our expectation. Superior also expect to achieve the Superior way forward EBITDA from operation target range $700 million to $750 million by the end of 2024, which is down two years ahead of expectation.
I will now turn the call over to Beth to discuss financial results in more details.
Beth Summers
Thank you, Luc, and good morning, everyone. As Luc mentioned, Superior's fourth quarter adjusted EBITDA of $182.6 million was a record for us in the fourth quarter and was an increase of $40.4 million compared to the prior year quarter, primarily due to higher EBITDA from operations, partially offset by higher corporate costs and a realized loss on foreign currency hedging contracts compared to a gain in the prior year quarter.
The full year 2022 adjusted EBITDA was $449.8 million, which was $51.4 million higher than the 2021, primarily due to an increase in EBITDA from operations, partially offset by higher corporate costs and a realized loss on foreign currency hedging contracts compared to a gain in the prior year.
The fourth quarter earnings from continuing operations was $63 million, an increase of $49.2 million compared to the prior year quarter. The primary driver for the higher earnings higher gross profit and a gain on derivatives and foreign currency translation of borrowings compared to a loss in the prior year quarter, partially offset by higher SD&A income taxes and finance expense.
Full year net loss from continuing operations of $87.9 million decreased by $105.1 million compared to the prior year, primarily due to a loss on derivatives and foreign currency translation of borrowings and higher SG&A, partially offset by higher gross profit, lower finance expense and lower income tax expense.
Turning now to the individual business results. U.S. propane adjusted EBITDA for the fourth quarter was $116.7 million, an increase of $36.8 million compared to the prior year quarter, primarily due to the impact of acquisitions completed in the current year, and to a lesser extent, increased prices to offset inflation and the impact of the weaker Canadian dollar on the translation of U.S. denominated transactions.
Full year adjusted EBITDA in 2022 for U.S. propane was $284.9 million, an increase of $58.7 million compared to 2021, primarily due to the impact of acquisitions completed in the current and prior year and, to a lesser extent, higher unit margins, the impact of the weaker Canadian dollar on the translation of U.S.-denominated transactions and the increased cost due to inflation.
Canadian propane adjusted EBITDA was $58.3 million. This was an increase of $4.7 million compared to the prior year quarter, primarily due to higher prices to offset the impact of inflation. Full year adjusted EBITDA in 2022 for Canadian propane was $144.8 million, a decrease of $15.4 million compared to 2021, primarily due to the impact of the huge benefit recorded in the prior year, lower sales of carbon offset credits and increased costs due to higher commodity prices and inflation, partially offset by higher sales volumes and unit margins.
Wholesale propane adjusted EBITDA was $22.7 million, an increase of $13.1 million compared to the prior year quarter. This was primarily due to the impact of the Kiva acquisition. Full year adjusted EBITDA in 2022 for wholesale propane was $48.7 million, an increase of $25.2 million compared to 2021. This was primarily due to the impact of the Kiva acquisition and, to a lesser extent, stronger propane wholesale market fundamentals compared to the prior year.
Turning to corporate results, the adjusted EBITDA guidance and leverage. Corporate administrative costs for the fourth quarter were $11 million, an increase of $6.4 million compared to the prior year quarter, primarily due to higher insurance costs, professional fees, the impact of inflation and higher incentive plan costs.
Superior realized the loss on foreign currency hedging contracts of $4.1 million compared to a gain of $3.7 million in the prior year quarter due to lower average hedge rates relative to changes in exchange rates.
On a full year basis, corporate administrative costs were $25.9 million, an increase of $1.8 million compared to 2021. This was primarily due to higher self-insurance, insurance claims, partially offset by lower incentive plan costs due to the decline in Superior share price compared to the prior year.
For 2022, Superior realized a loss on foreign currency hedging contracts of $2.7 million. This compared to a gain of $12.6 million in the prior year due to lower average hedge rates relative to changes in exchange rates.
Superior's total net debt to adjusted EBITDA leverage ratio for the trailing 12 months ended December 31, 2022, was 4.1 time, which is slightly above our target range of 3.5 time to 4 time. The higher average leverage ratio was primarily due to the impact of higher U.S. CAD rate on U.S.-denominated debt.
Superior is maintaining its targeted leverage ratio at 3.5 time to 4 time, while it continues to focus on integrating acquisitions and executing on Superior Way Forward initiatives, including achievement of the anticipated organic growth in the Certarus business. Superior expects to be in the target range of 3.5 time to 4 time at the close of the acquisition of Certarus.
As Luc mentioned, we achieved our 2022 adjusted EBITDA guidance range of $425 million to $465 million, with adjusted EBITDA of $449.8 million, coming in above the midpoint of that range. This extends our streak of achieving the adjusted EBITDA guidance we set each year and demonstrates the resiliency of our business.
For 2023, we're introducing our pro forma adjusted EBITDA guidance range of $585 million to $635 million. Based on the midpoint of the 2023 pro forma adjusted EBITDA guidance range, this is a 36% increase compared to the full year 2022 adjusted EBITDA of $449.8 million.
The increase is due to the expected contribution from the Certarus acquisition, the first quarter contribution from Kamps, Kiva and Quarles acquisitions completed in 2022 being partially offset by the warmer weather experienced at the start of 2023.
The 2023 pro forma adjusted EBITDA guidance range includes estimated full year Certarus adjusted EBITDA in the range of $140 million to $150 million. This guidance assumes average weather for the remainder of 2023 to be consistent with the five-year average.
As for our capital allocation priorities in 2023 and going forward, the Certarus acquisition presents us with a great opportunity to invest capital in high organic growth. We will continue to evaluate M&A targets in the propane space, but growth CapEx for Certarus is currently our view of the near-term priority.
We also have the ability to repurchase shares through the normal course issuer bid we announced in 2022 if that opportunity generates the appropriate level of returns. We're focused on creating long-term shareholder value and we'll only allocate capital to our most accretive opportunities.
With that, I'll turn the call over to Q&A.
Question-and-Answer Session
Operator
[Operator Instructions] Our first question will come from the line of Ben Isaacson from Scotiabank. Your line is open.
Ben Isaacson
Thank you, very much, and good morning, everyone. Congrats on the quarter. Just a question on your guidance. If you strip out the Certarus, the acquisition where you've called for $140 million to $150 million of adjusted EBITDA, can you talk about the change from '22 to '23 for the rest of the business? How much of that is the normalization of volume due to weather? How much of that is organic growth? And then how much of that is utilization of synergies from some of the smaller acquisitions that we made? Thank you.
Luc Desjardins
Okay.
Ben Isaacson
I'm just going to...
Beth Summers
Yes, I can -- so what I'll do is at a high level here, just sort of call out some of the pieces. So, the first one, and maybe I'll talk about it from a division perspective. So, if you think about the U.S. Propane division, on a year-over-year basis, basically, think of it as sort of a $20 million to $25 million increase. And that's being driven by sort of the impact of the M&A. So, you've got the Kiva and the Quarles acquisition. So, you're going to have Q1. But there is a weather impact or there was headwinds from a weather perspective in January and think of that as sort of a $10 million to $15 million range.
So, you have a bit of an offset there as well. From a Canadian propane perspective, well, there's going to be sort of volume and margin growth in that business and a little bit from the McRobert acquisition. What you are seeing on a year-over-year basis is we're expecting, you would have seen in the disclosure carbon credit sales.
So, from a carbon credit sale perspective, we would anticipate some lower carbon credit sales moving into 2023 versus 2022 as well as there will be no wage subsidy or the used benefit on a year-over-year basis.
So net overall, think of that as a negative headwind on that business in and around a range of, say, around $5 million. Those are really, I'm going to say sort of the key changes that would take you in the base business from that 2022 of the $449 million that you would have seen up in that range -- yes, about flat. The rest of the business, you've got ups and downs.
Luc Desjardins
Yes. So, on the running rate with normal weather, let's say, in the sixth time would probably be $620 to $625 million, wasn't for the start of the year with such warm weather.
Ben Isaacson
Perfect. And then just a follow-up on that one for the big acquisition that you made in December. On your slide deck at the time, you talked -- you talked about the virtual pipeline providing you with optionality. Can you talk about what that could look like, that optionality? And can you also just remind us what the synergies are from this acquisition? Thank you.
Luc Desjardins
Yes, I'll start with the synergy and we'll talk about the question on the. No, there are really not much synergy. This is a division with own products selling to industrial, they can take the equipment and use CNG or RNG. So, there's -- the flexibilities you could have different liquid that goes into those trailer so which is great because you can move them, they're mobile, and you can use different products.
Overall, this is a business that has a fantastic management team, very good assets. It's a pretty new industry with big growth, and we intend to run it totally separately. What we like to do is, and then we're doing in 2023 for sure, and I hope even after me, it's always the priority because I always said in my career, probably done over 100 deals. And there's nothing more profitable than internal growth.
So, compared to acquisition, we make acquisitions say in the seven, eight -- let's say, in the eight multiple. And after we've done our Superior Way execution, we get down to six. So, it's worthwhile and it's good, but when you look at internal growth, a better return than that. Great business, will be run truly separately, same management team, and we're there to help and support them in their growth. So not much synergy in that regard.
Beth Summers
Yes. Just to answer the optionality portion of the question, are you referring to the optionality to the customer and the ability to move to lower carbon fuels using the virtual pipeline where primarily they'd be using disclose now? Are you talking about it from a capital allocation perspective in the business?
Ben Isaacson
No, the first one.
Beth Summers
Okay. Yes. So, I mean, fundamentally, we're -- the virtual pipeline provides a lower carbon options. So, we're -- in particular, diesels being used for generating energy, et cetera. What it does is it allows the customer to now use either Renewable Natural Gas in the instances where that's available or Natural Gas, which is lower carbon intensity than diesel, which is typically what it's replacing. And then on top of that, there's also opportunities from a Hydrogen perspective as well as we go forward. If there's anything more specific you want -- happy to answer.
Ben Isaacson
Okay. Thank you, so much.
Beth Summers
Okay. Thank you.
Operator
[Operator Instructions] And our next question comes from the line of Gary Ho from Desjardins Capital Markets. Your line is open.
Gary Ho
Thanks, and good morning. Maybe more of a high-level question on the CEO announcement. The wording from the press release identifies internal growth, operational improvement and executing accretive tuck-in acquisitions. So, it feels like the larger platform-type deals were not mentioned.
And I know you've completed several larger ones recently, including Certarus. So, am I reading into that correctly, strategy will be more inward focused, organic growth and smaller tuck-ins that makes sense?
Luc Desjardins
I think for the short term, it makes sense because we want to allocate more of the overall capital to Certarus and then we still intend to do some small tuck-in. The tuck-in, I've talked earlier about eight turns. We buy the small tuck-in around sex, seven would be the high number that we would pay. And there's often the return are more than 25% improvement, the more in the 30%, 35% range of improvement of the small tuck-in.
So, we intend to do small tech in 2023 and then Certarus more capital for that internal growth opportunity. What happens after that? I think it's a good way to look at '23 or in '24, '25, -- it's all a question of four-time leverage. We don't want to go over that.
So, we'll be able to -- of course, there's a lot of opportunity in the propane -- in the states and some in Canada. And we intend to continue to do that. But we're always taking in consideration what's our leverage ratio. So, I can tell you more specifically '23, I just did. After that and the remains to be seen. But yes, we intend and time to continue to do propane acquisition very accretive as well.
Gary Ho
Okay. Maybe just follow on to that to make sure I understand. So outside of the growth CapEx potentially slowing down M&A may that lead to ability to kind of pay down debt quicker? Is that an increased emphasis perhaps?
Beth Summers
Yes. I mean, I think we'll always look at it and make a decision on how we want to allocate capital, so it drives the highest shareholder return. And the reality is there will be times when it makes sense to pay down debt and net overall. I mean I think where Luc's comments coming from on the 2023 is when you look at it as we've sort of discuss words towards the top end of our 3.5 time to 4 time.
So, in looking at all of the financial metrics, it's just we have to be more prudent and focused on where we're going to allocate that capital. As you move out and as the synergies are delivered in the M&A transactions that we've completed, and they start rolling through, it frees up more free cash. As the organic growth delivers more free cash, there is more room to look at more potential acquisitions or, frankly, more potential internal inorganic growth.
As I said before, we'll always look at it and allocate the capital to the highest returns. But as you start moving out in the future year as the business as always and we've talked about, as those acquisitions are fully integrated and the synergies realized, it -- we very quickly delever the business. So, it provides that opportunity to continue to grow or allocate that capital either to internal growth, to M&A transactions, to potentially share buybacks or frankly reducing debt.
Gary Ho
Okay. Makes sense. And then just one more question just on. Can you give us an update on the closing of the transaction, especially in the Canadian bureau side, maybe a more narrower range than first half of '23 that you've disclosed? And as a related question, the lockup of management and larger shareholders, have you chatted with them their intentions to hold on the stock after the lockup, that's been a bit of an overhang for investors developing?
Luc Desjardins
Maybe I'll start with one point and ask you Beth for -- and Darren is here, Chief Legal Officer, to add some details necessarily. But -- so the U.S. business were good. That's 80% of the business and more growth there. So very pleased about that. Canadian, it's a work in progress. And it's hard to predict the day they're asking questions, and we want to be very straight to giving them all the answer they have. So, I'll turn to Darren for -- he is with Lars I discussion on a regular basis. So, I'll turn to him for the rest.
Darren Hribar
Sure. Thanks, Luc. Yes, I think, as we've said, in the U.S., the waiting period, under the HSR Act expired February 13. We've got a final order. So, the only thing really -- the only condition left to closing is receipt of approval from the Canadian Competition Bureau. Their review is still ongoing, and we expect to need some additional time to conclude that review, which is why we've extended the expected timing to the first half of 2023.
Our view on that, I think, I guess, we would say, look, the businesses are highly complementary, not in the same product market. So, we expect we'll be able to get that regulatory clearance in the first half of 2023. But the reason we pushed it out is we think the bureau is going to likely need a little more time to get there.
Gary Ho
Okay. And any feedback on the lockup?
Luc Desjardins
Beth, let's comment.
Beth Summers
Yes. I mean, I'll jump in on the lockup and just sort of walk through at the highest level. So, at the highest level, roughly 45% is subject to lockup. And that's split by roughly -- 36% of that would be after six months and then roughly 9% would be after three months, and then the rest of that would be tradable on day one.
Operator
[Operator Instructions] And our next question comes from the line of Nelson Ng from RBC Capital Markets. Your line is open.
Nelson Ng
Thanks, and congrats on a strong quarter. So just on capital allocation. I think in the MD&A, the guidance was for $200 million to $240 million for, I guess, maintenance CapEx, nonrecurring CapEx and leases. Can you provide a breakdown of that? And also, how much of that $200 million to $240 million is going to Certarus?
Beth Summers
Yes.
Luc Desjardins
Yes.
Beth Summers
Okay. So first all, Nelson, maybe the best way to split it into the broad categories first. So, of the $200 million to $240 million, think of the maintenance, CapEx in the range of $75 million to $80 million. And so that would be split roughly $30 million Canada in that -- and these are rough ranges, but $25 million in the U.S. and then Certarus maintenance CapEx would be roughly $15 million for 2023.
Then if you look at capital leases, think of those in roughly $30 million to $40 million range. And then looking at the growth in nonrecurring, that's the $105 million to sort of $115 million. So Certarus of that, think of that, and this is for the nine months going forward, that sort of $40 million to $50 million. And then Canada, sort of in the
$20 million range, the U.S. and about a $40 million range.
Luc Desjardins
Also, full year...
Nelson Ng
So just to clarify, so the actual amount invested -- so that $40 million to $50 million for Certarus, that's for the nine months. So, for the full year, it'd obviously be a bit higher than that, right?
Beth Summers
Yes. Think of it for the full year in the range of $100 million.
Luc Desjardins
Yes.
Beth Summers
Yes. That -- It's obviously depending when that CapEx when you're thinking it for the full year. And maybe that's the best way to think about it in the full year because it's going to depend when, in particular, the deliveries of the MSUs occur, right?
Luc Desjardins
But it's, call it, $100 million for the year.
Nelson Ng
Okay. All right. That's fair. So, $100 million just for the trucks and trailers and before leases and -- like before maintenance CapEx?
Luc Desjardins
Yes.
Nelson Ng
Okay. That's great. And then the next question is, I think, Luc, you mentioned that Certarus will operate on a stand-alone basis. and there's limited synergies. But I guess longer term, do you see -- I guess you'll be retiring soon, probably not, your decision.
But do you see the benefits of putting the two together in terms of, I guess, Certarus is headquartered in Calgary, you've got most of their operations in the U.S. and then Superior Plus is headquartered in Toronto. So, I guess from a corporate perspective, there should be some synergies there.
Luc Desjardins
No. So what -- we have a division with SCL in Calgary. We have a division with the U.S. business, and we have the Canadian business located in Mississauga, Ontario. That business will be located in Calgary. It's a -- we're a North America business, and we have divisions that allocated or spread out between North America.
So, I probably forgot one thing on synergy. I'm a strong believer that 80% of their business in the state is a big industrial company. But those big industrial company -- and they're replacing diesel. But those big industrial company also use propane.
So, I think when in time and within the next year as we work together, we'll look at helping each other to sell more product. As you know, Superior Canada, I don't know if there's a big industrial company, we don't do business with. It's probably all of them. And what Certarus is replacing is mainly diesel.
So, can we take those accounts and those relationships and say, hey, Certarus team, let's introduce you to those big industrial customers in Canada and see if you can replace the diesel with your product, 100%. So, there are some synergies. I thought the question was more on cost synergy. There's not much there if nothing.
But on the growth synergy, absolutely. We're going to touch base with all of their customers in the states we don't have. They're middle big industrial. As you know, today, what we do in the States is like 90-plus percent residential. And then in Canada, we're big industrial. We're at pretty much in Canada on big industrial and want to make sure that those contact relationships develop more internal growth business for both businesses, and that will happen. I'm very convinced.
Nelson Ng
Okay. That's -- so it's more on the cross-selling side where you see the value add. And then just last question -- just one last question in terms of like inflation and staff and wage pressures. I guess you've been through the worst of it by now. But are you still seeing any -- how is the labor market in terms of finding seasonal drivers? And can you just touch base on wages?
Luc Desjardins
Yes. Many times, during COVID and during all the lot of people changing position these days have a lot of exposure on that. And I think we're lucky. I think we're lucky because we have over 85% of our employees are responding that we're at least 85% -- 100% -- happy to work with us, the way we treat them, the way we communicate, the way we have them participate in the business. It's a very high-quality culture and values that we've built.
And what we've learned from Certarus would be multi-time, we meet and travel with them. It's just a perfect fit on culture value, very human. And so, we're lucky. And I always add to that from the truck drivers in our propane business, they're small truck and the driver goes out during the day, does this stain come back home. There's a ton of truck drivers that have larger truck and larger miles that they do, they go away from home which is much harder.
So, I wouldn't say it's easy what the truck driver do, winter time gets very rough at many times in many areas. But it's -- we don't have real difficulty of finding good truck drivers. And once they work for us, they're -- I would call a lot of our employees are kind lifer. They're well treated, they love to work superior, appreciate our success and our communication style. And it's really very proud and very pleased of the overall thousands of employees appreciate working here, and we want to treat them very well and they deserve it.
Operator
[Operator Instructions] Our next question comes from the line of Steven Hansen from Raymond James. Your line is open.
Steven Hansen
Good morning, everyone. Just a quick one again going back to Certarus. The previous owner had been spending quite aggressively on the fleet to grow the top line, I think, logically. And if I'm not mistaken, that included a large inflow of new units in the back half of last year.
So, you spoke briefly, Luc, earlier to the CapEx profile going forward. But I just wanted to get a sense for what kind of untapped utilization you have available today with the units that came in last year, how quickly do you need to replenish or add new units? So -- and ultimately, what kind of organic growth do you think is sustainable over the next couple of years for the top line for this business or maybe from an EBITDA perspective? Thanks.
Luc Desjardins
Yes. And I'm going to be pleased that the next call I probably won't be here but I'd be pleased that we could invite Curtis, who's the President and his team so that they can answer a lot of those specific questions. So, I think from organic growth, and correct me bit. And Darren, if you think the number is not exactly what we've talked about, but we certainly think in the at least 10% growth a year, internal growth. I hope it could be more.
From your question -- first question on CapEx, I think we're continuing to spend as much as they spend in the past, if not more, with $100 million in 2023. So, I think we're not slowing down their progress and their opportunity to develop new business. If more cash flow comes in, I think we hopefully can push more their way. But for the moment, from a budget and where we stand today, it looks more like $100 million. And Beth, anything else you think I miss or...
Beth Summers
Yes. I mean I think what I would add is along your question of -- for the new units that came in, whether they're being utilized and whether they're ramped up, I mean the beauty of the business is that there's much more demand than for mobile storage units than there is supply. So, for those units, they're very quickly being used, being used to supply customers and frankly, generating that EBITDA.
So, if you look at it, I think it's with that business, it's really more getting the MSUs produced, purchased and then in they can quickly be generated -- to generate EBITDA. And so, from that perspective, they would all be being utilized. And again, from a sales perspective, there's more customers than those MSUs.
Steven Hansen
That's great. And maybe just a follow-up, and maybe this is too far into the weeds for now, but I'll just ask anyway. So just around sort of the hub-and-spoke strategy as it relates to certarus. Are They in all the regions they need to be? Luc, you had referenced some cross-selling earlier I'm just trying to get a sense for whether this is a density densification strategy at this point and ability to reap incremental high-margin return opportunities as opposed to sort of green fielding new hubs that might be a little bit less margin accretive? Where are they in that strategy, like set of evolution, I guess, thus far?
Luc Desjardins
I'll answer from what we know, and I always preface that those answers with next quarter, the real people that knows it very well can answer more specifically. My understanding is there's such a growth in this industry in those three products that we talked about that they can supply that the number of hubs will continue to grow, and there will be more. I think the intent is to have three to four more hubs every year.
And if you look at they've done a big study with Mackenzie that shows the growth in those three products. And I won't give you the number because, they're totally the billions and billions of growths in those industries. So -- they're in the best position in North America to be the one that grows with their position and their team that they built and the equipment they've already put in place.
So, I would say three to four hub continuously for years to come and continue to grow. And I don't see that -- if there's one thing and result can help having a good year, I think they can grow more than 10%. We say that because we want to be conservative and not giving you other number than what we're sure about, but there's growth there that could be in the 15% a year for sure.
Operator
[Operator Instructions] And I'm not showing any further questions in the queue. I'd like to turn the call back over to Luc Desjardins, President and CEO for closing remarks.
Luc Desjardins
So, I'll wrap up this call, I would like to take this opportunity to thank all of you for being there and for all the 12 years you followed this company and many of you following us and supporting Superior. It has been a pleasure and a privilege to share with you this incredible journey of growth and the transformation of Superior, which we've gone to over the years, many of you remember, multi-business we have. Now we're focused on energy big time North America.
I'm proud of all the employees and what has been accomplished. We have a super great management team. I'm confident that I'm leaving this company in exceptional position to pursue its growth. I want to mention my appreciation to everyone and every stakeholder, team, employee, management, Board, everybody that's really worked hard to make this situation happen over the years.
And I really have told that to people internally in the last four, five months and maybe more in the last three years. With the Certarus deal, when you think of our platform with a number of customers we have, which in the 1 million and then you think of Certarus, what they bring as a new entry with internal growth. I mean, I'm leaving this company in better shape than it was even as we ended up just being in propane, it was good, and we built and we improve every business 25%.
Now we're just going to the next level. And this is the transformation that is happening and very, very proud of everybody. I'm very pleased that I'm leaving with this new game and new opportunity for a super great Canadian company.
So, with that, I wish you all the best. Thank you for your support. And hopefully, the question was, Luc, you're retiring? I don't know what retiring is. I will not retire. I'll be working probably not at the same pace as the full CEO, but doing something of a scale to keep busy because I love business and it's my passion and in my life. So, I wish you all the best. Thank you.
Operator
This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.
For further details see:
Superior Plus Corp. (SUUIF) Q4 2022 Earnings Call Transcript