Monro, Inc. · NASDAQ:MNRO
Monro — Investor Presentation (September 2019)
26 slides from Monro's investor presentation, September 2019
Slide 1: Monro, Inc. Investor Presentation
Monro, Inc. Investor Presentation September 2019
Slide 2: Safe Harbor Statement and Non-GAAP Measures
Safe Harbor Statement and Non-GAAP Measures Certain statements in this presentation, other than statements of historical fact, including estimates, projections, statements related to our business plans and operating results are forward-looking statements within the meaning of the Private Securities
Slide 3: Company Overview
Company Overview A Leading Chain of Independently Owned and Operated Tire and Auto Service Locations Dominant in the Northeastern U.S. and expanding in Southern and Western markets Fiscal 2019 sales of $1,200.2 million 1,262 company operated stores in 30 states and 98 franchised locations as o
Slide 4: A Unique Operating Model
A Unique Operating Model Monro Has a Diversified Supply Chain, Sourcing High Quality, Low Cost Parts Direct and a Strong Portfolio of Tire Brands PARTS Monro sources these parts from leading Secondary parts distribution: aftermarket parts suppliers: Brake Rotors and Pads Filters Steering and S
Slide 5: A Favorable Industry Backdrop
A Favorable Industry Backdrop Favorable Industry Backdrop for Automotive Services with the Vehicles in Operation Expected to Grow Significantly Over the Next Few Years 20 U.S. Annual Light Vehicle Sales U.S. Light Vehicles in Operation (VIO) 300 18 290 16 280 14 270 12 260 10 250 8 240 6 230 4 220 2
Slide 6: A Favorable Industry Backdrop
A Favorable Industry Backdrop Monro is Well-Positioned to Capitalize on Positive Industry Trends, with Our Sweet Spot Experiencing the Fastest Growth in Vehicles in Operation Vehicles in Operation – 0 to 5 Years Vehicles in Operation – 6 to 12 Years 120 120 110 +6.56% CAGR -.03% CAGR 110 -3.97% CAGR
Slide 7: A Favorable Industry Backdrop
A Favorable Industry Backdrop Monro Operates in the $238 Billion Do-It-For-Me* Segment of $297 Billion U.S. Automotive Aftermarket Industry Automotive Aftermarket DIFM vs. DIY Sales 2010 % 2018 % CAGR (outlets) (outlets) 300,000 Dealers 18,460 14.3% 16,753 12.7% (1.2%) 250,000 General 200,000 Repair
Slide 8: First Quarter Fiscal 2020 Highlights
First Quarter Fiscal 2020 Highlights Achieved Sixth Consecutive Quarter of Comparable Store Sales Growth1 Quarterly Comps Trends 2-Year Stacked Quarterly Comps Trends 3.5% 3.5% 3.0% 3.0% 2.5% 2.5% 2.0% 2.0% 1.5% 1.5% 1.0% 1.0% 0.5% 0.5% 0.0% 0.0% 4QFY18 1 1QFY19 2QFY19 3QFY19 1 4QFY19 1 1QFY20 1QFY1
Slide 9: A Scalable Platform: Recent Acquisitions
A Scalable Platform: Recent Acquisitions Acquisitions Announced and Completed in Fiscal 2020 Represent $75M in Annualized Sales Announced and Completed Acquisitions Completed acquisition of 40 retail locations and one distribution center in California during 1QFY20 Entered a new state, expanding
Slide 10: Driving Long-Term Sustainable Growth
Driving Long-Term Sustainable Growth Improve Customer Experience Optimize Product & • Online reputation management Service Offering • Consistent in-store experience • Redefined selling approach • Consistent store appearance • Optimized tire assortment Scalable Platform to Enhance Customer-Centric Dr
Slide 11: Improve Customer Experience
Improve Customer Experience Improve SEO and local listing management Online Reputation Effectively build and manage online presence Management Increased “Star Ratings” to 4.6 All-time Deliver a best-in-class experience to all customers Consistent In-Store Provide clear product choices and
Slide 12: Store Refresh & Brand Consolidation Initiative
Store Refresh & Brand Consolidation Initiative Strong Performance of Reimaged Stores Driving Confidence in Store Refresh and Brand Consolidation Strategy Same store sales and guest satisfaction ratings at reimaged locations significantly outperformed Company average during 1QFY20 Significantly a
Slide 13: Enhance Customer-Centric Engagement
Enhance Customer-Centric Engagement Focus marketing spend to higher ROI channels Focus on direct marketing via new analytic-based Customer Retention CRM platform Enhance private label credit card offering Use analytics to optimize digital efforts Leverage market segmentation and demographi
Slide 14: Monro.Forward Progress Update
Monro.Forward Progress Update Monro.Forward Initiatives Well Underway and Advancing as Planned Continued investments in in-store technology with the rollout of a new digital phone Enhance Customer- system across Monro’s store base during FY20 Centric Engagement Collaboration with Amazon.com at m
Slide 15: Optimize Product & Service Offering
Optimize Product & Service Offering Past Present Future Simplified invoices and inspection forms Redefined Selling Clearly defined ‘Good, Better, Best’ product options Educate customers on new tire installation, brake Approach and oil change service options Improve tire sales strategy to off
Slide 16: Accelerate Productivity & Team Engagement
Accelerate Productivity & Team Engagement Achieve the right balance of labor and technical Optimized Store abilities across our stores Staffing Model Implement data-driven store scheduling software Attract, train and retain talented technicians and managers Clearly Defined Career Path Launch
Slide 17: Monro.Forward Progress Update
Monro.Forward Progress Update Monro.Forward Initiatives Well Underway and Advancing as Planned Continued momentum of Good-Better-Best product and service packages Optimize Product & Optimizing tire assortment to become the #1 destination for tires at any price point Service Offering Will conti
Slide 18: Scalable Platform to Drive Sustainable Growth
Scalable Platform to Drive Sustainable Growth A Scalable Business Model with Multiple Avenues for Growth Same Store Sales Growth Through Monro.Forward, drive higher customer retention and acquisition rates Acquisitions Create value through profitable Continue to increase store density in our 3
Slide 19: A Proven M&A Strategy
A Proven M&A Strategy Monro’s Acquisition Strategy Has Delivered Significant Growth Over the Years A Proven Track Record 49 acquisitions in the last 17 fiscal years, encompassing 724 locations and $970 million of revenue 33 acquisitions in the past 7 fiscal years, adding 429 locations and $630 m
Slide 20: First Quarter Fiscal 2020 Results
First Quarter Fiscal 2020 Results Solid Top-Line and Margin Expansion Reflect Improving Execution Across the Business 1QFY20 1QFY19 Δ Sales (millions) $317.1 $295.8 7.2% Same Store Sales 0.8% 1.9% (110 bps) Gross Margin 40.4% 39.6% 80 bps Operating Margin 11.5% 11.2% 30 bps GAAP EPS $.67 $.62 8.1% O
Slide 21: Fiscal 2020 Outlook
Fiscal 2020 Outlook Updates Fiscal 2020 Comparable Store Sales Guidance and Reiterates EPS Guidance Operating Margin FY20 FY19 Δ Assumes operating margin of ~11.3% at midpoint of FY20 sales guidance Sales (millions) $1,285 to $1,315 $1,200 7% to 10% Expect stable tire and oil costs year-over-yea
Slide 22: Longer-Term Organic Growth Financial Targets
Longer-Term Organic Growth Financial Targets Accelerating Same Store Sales Growth Drives Operating Leverage and Double Digit Earnings Growth 5.0% SSS Improvement 4.0% + 4.0% Same Store Sales Growth Accelerate from 2% to above 4% 3.0% 2.3% 2.0% 1.0% Operating Margin Return to 12%+ Operating Margi
Slide 23: Disciplined Capital Allocation
Disciplined Capital Allocation Executing on Growth Strategy While Maintaining a Disciplined Approach to Capital Allocation Investing in the Business Capex of $14.0M during 1QFY20 Continue to expect ~$75M of incremental Capex over 5 years to invest in store re-image and technology Executing on M&
Slide 24: Investment Highlights
Investment Highlights Leading chain of Company-operated undercar care facilities in the U.S. with a wide breadth of product and service offerings Strong position in Northeast, Great Lakes and Mid-Atlantic and expanding into Southern and Western markets with a presence in 30 states 18 years of
Slide 25: Appendix
Appendix 25
Slide 26: Monro.Forward Strategic Initiatives
Monro.Forward Strategic Initiatives Q4 FY18 FY19 Q2 FY19 Q3 FY19 Q4 FY19 FY20 Q2 FY20 Q3 FY20 Q4 FY20 FY21 Foundational technology & tools Pilot store refresh & Scale store refresh & operational operational excellence excellence Improve Customer Technology based in-store experience Experience Schedu