Arko (ARKO) investor relations material

Company Overview and Growth Strategy

• Operates over 3,500 locations across 30+ states, with a focus on retail, wholesale, and fleet distribution, and employs over 10,000 people.

• Completed 26 acquisitions since 2013, totaling ~$1.8B in aggregate purchase price, emphasizing return on invested capital and disciplined M&A.

• Recently took ARKO Petroleum public, retaining a 75.9%–76% stake and raising ~$200 million to reduce debt.

• Industry remains highly fragmented, with 63% of locations still mom-and-pop owned, presenting significant growth opportunities.

• Management team has over 25 years of experience, with low turnover and a focus on core markets.

Operational Transformation and Dealerization

• Initiated a transformation plan in 2024, shifting focus to core assets and dealerizing less strategic retail locations.

• Converted ~410 stores to dealer-operated since mid-2024, with another 120 planned, resulting in over $20 million annual profit increase and $10 million G&A reduction.

• Retail footprint reduced from 1,540 to 1,000 stores, concentrating on markets with strong brand equity.

• Dealerization involves 10-year agreements with entrepreneurial operators, improving profitability and reducing maintenance CapEx.

• Segmentation of retail portfolio, targeted reinvestment, accelerated remodels, and new procure-to-pay platform implemented.

Retail Initiatives and Customer Engagement

• Launched Fueling America's Future campaign, offering pump discounts tied to in-store purchases to drive traffic.

• Shifted focus from declining cigarette sales to higher-margin other tobacco products, growing OTP by 4% in 2025.

• Expanded loyalty program to 2.4 million members, with loyal customers purchasing 48% more than non-members.

• Invested in food service with the fas craves brand, remodeling stores and seeing double-digit sales and gallon increases in pilot locations.

• Remodels show pilot store sales up 14%, gallons up 12%, and multiple categories doubled sales.