Uni-Select Inc.

Uni-Select — Q3 2018 Earnings Presentation

31 slides from Uni-Select's earnings presentation, Nov 14, 2018

  1. Slide 1: Q3 2018 Conference Call

    Q3 2018 (Ended Sept. 30, 2018) Conference Call November 14, 2018

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements Certain statements made in this presentation are forward-looking statements. These forward-looking statements include, but are not limited to, statements relating to Uni-Select’s financial guidance (including, without limitation, adjusted EBITDA margin and organic sales by

  3. Slide 3: Introductory Remarks

    Introductory Remarks UNI-SELECT.

  4. Slide 4: Strategic Alternatives Review - Update

    Strategic Alternatives Review - Update  On September 18, we announced the formation of a Special Committee of independent members of the Board of Directors to oversee a review of strategic alternatives  Since then, the Special Committee and the Board of Directors have had multiple meetings with it

  5. Slide 5: Expanded 20/20 Initiative (25/20 Plan)

    Expanded 20/20 Initiative (25/20 Plan)  We continued to execute on our 20/20 cost savings initiative launched a year ago to generate annual recurring savings of $20.0 million by 2020  As at quarter end, we have realized $12.0 million in annualized savings or 60% of the target  In the spirit of co

  6. Slide 6: Overview of Q3-18 Results

    Overview of Q3-18 Results  Focused on execution with improved organic sales growth in all business units  Higher adjusted EBITDA  Strong cash flow generation  Deleveraged our balance sheet and ended the quarter with a net debt to EBITDA ratio of 3.1x, from 3.6x in Q2-18  Amended and extended ou

  7. Slide 7: Q3 2018 Highlights

    Q3 2018 Highlights UNI-SELECT.

  8. Slide 8: Consolidated Results – Q3 2018 Highlights

    Consolidated Results – Q3 2018 Highlights HIGHLIGHTS Financial Results  Revenues increased 13.4%, driven by Q3-17 Q3-18 VAR the TPA contribution and organic Revenues 395.8 448.8 13.4% growth Organic growth(1) 3.4%  Organic growth(1) at 3.4%, driven by all EBITDA(1) 32.2 29.7 (7.7%) segments: TPA a

  9. Slide 9: FinishMaster US – Q3 2018 Highlights

    FinishMaster US – Q3 2018 Highlights Financial Results HIGHLIGHTS Q3-17 Q3-18 VAR  Revenues increased 3.7%, driven Revenues 206.5 214.2 3.7% entirely by organic growth(1) Organic growth(1) 3.7% EBITDA(1) 24.4 21.3 (12.7%)  YTD organic growth is 0.6% EBITDA %(1) 11.8% 10.0% (180 bps)  EBITDA margi

  10. Slide 10: Canadian Automotive Group – Q3 2018 Highlights

    Canadian Automotive Group – Q3 2018 Highlights HIGHLIGHTS Financial Results  Revenues decreased 1.9% primarily Q3-17 Q3-18 VAR explained by the FX conversion Revenues 133.6 131.1 (1.9%) Organic growth(1) 0.5%  Organic growth(1) of 0.5%, primarily driven by customers taking advantage EBITDA(1) 10.7

  11. Slide 11: The Parts Alliance UK – Q3 2018 Highlights

    The Parts Alliance UK – Q3 2018 Highlights HIGHLIGHTS Financial Results Q3-17 Q3-18  Revenues of $103.5 million (started Revenues 55.7 103.5 85.8% contributing on August 7 last year) Organic growth(1) 9.4%  Organic growth(1) of 9.4%, of which EBITDA(1) 2.3 6.5 - ~3% was generated from greenfields

  12. Slide 12: Q3 2018 Financial Review

    Q3 2018 Financial Review UNI-SELECT.

  13. Slide 13: Typical Impact of Seasonality on UNS Results

    Typical Impact of Seasonality on UNS Results Q1 Q2 Q3 Q4 FinishMaster SOFT STRONG STRONGEST SOFT CAG SOFTEST STRONGEST STRONG SOFT TPA STRONGEST STRONG SOFT SOFT p13

  14. Slide 14: Revenues

    Revenues Q3 Total Sales by Business Segment TTM Total Sales by Business Segment +13% 448.8 +32% 1,747.5 395.8 103.5 417.6 55.7 1,324.2 55.7 133.6 131.1 504.4 472.1 206.5 214.2 796.4 825.5 Q3-17 Q3-18 TTM 2017 TTM 2018 (1) FinishMaster US Canadian Automotive Group The Parts Alliance UK FinishMaster U

  15. Slide 15: EBITDA and Adjusted EBITDA

    EBITDA(1) and Adjusted EBITDA(1) Q3 EBITDA(1) by Business Segment Q3 Adj. EBITDA(1) by Business Segment 32.2 29.7 33.9 8.6% 34.9 8.1% 2.3 6.6% 2.3 7.8% 6.5 6.5 10.7 10.7 9.4 9.4 24.4 24.4 21.3 21.3 -3.5 -2.3 -5.2 -7.5 Q3-17 Q3-18 Q3-17 Q3-18 EBITDA margin EBITDA margin FinishMaster US Canadian Autom

  16. Slide 16: From 20/20 to 25/20 Plan

    From 20/20 to 25/20 Plan  The 20/20 initiative was launched in Q3-17. At the end of Q3-2018, we realized $12 million of annualized recurring savings or 60% of the target  Starting in the fourth quarter of 2018, expanded the scope of the 20/20 initiative to at least $25 million of recurring cost sa

  17. Slide 17: Earnings and EPS

    Earnings(1) and EPS(1) Earnings(1) EPS(1) 0.37 0.37 15.9 15.5 11.2 0.26 0.25 10.6 Impacted by increased financing & depreciation costs from TPA acquisition (1) Q3 Net Earnings Q3 Adj. Earnings (1) Q3 EPS Q3 Adj. EPS 2017 2018 2017 2018 Q3-18 Adj. earnings(1) decreased slightly mainly attributable to

  18. Slide 18: Cash Flow & FCF

    Cash Flow & FCF(1) Cash Flow from Operations Free Cash Flow(1) 133.1 Impacted by 126.7 100.0 changes in working capital 83.1 items 72.6 48.8 35.0 31.7 Q3 TTM Q2 TTM 2017 2018 2017 2018 Q3-18 cash flow from operations and free cash flow(1) were impacted by changes in working capital items: increased

  19. Slide 19: Financial Position

    Financial Position Total Net Debt(1) Funded Debt to Adj. EBITDA(1) 469 450 3.82x 3.84x 439 418 3.56x 3.60x 394 Amended and 3.12x extended credit agreement Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 At the end of the quarter, approximately $229.0 million was available under the long-

  20. Slide 20: Guidance

    GUIDANCE UNI-SELECT.

  21. Slide 21: 2018 Consolidated Guidance

    2018 Consolidated Guidance Consolidated Guidance (As of Sept. 18) Consolidated organic sales growth(1) 0.8% - 2.6% Consolidated adj. EBITDA(1) margin 6.75% - 7.25% Consolidated effective tax rate 22.0% - 24.0% Capex $26M - $29M Segment Guidance (As of Sept. 18) FM US – organic sales growth(1) 0.5% -

  22. Slide 22: Typical Impact of Seasonality on UNS Cashflow

    Typical Impact of Seasonality on UNS Cashflow Cashflow from operating activities (in millions of dollars) Q1 Q2 Q3 Q4 2016 (8) 38 49 55 2017 2 28 49 45 2018 (30) 39 72 2019E CASH BURN NEUTRAL TO POSITIVE STRONG p22

  23. Slide 23: In Summary

    In Summary  Uni-Select will continue to actively pursue its strategic alternatives review with its advisors to complete the review as expeditiously as possible  Expanded the 20/20 initiative to a 25/20 Plan with at least $25 million in recurring cost savings by 2020  Drive our operations to gener

  24. Slide 24: Appendix

    APPENDIX UNI-SELECT.

  25. Slide 25: Non-IFRS Financial Measures

    Non-IFRS Financial Measures The information included in this presentation contains certain financial measures that are inconsistent with IFRS. Non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented

  26. Slide 26: Non-IFRS Financial Measures (cont’d)

    Non-IFRS Financial Measures (cont’d)  EBITDA margin and The EBITDA margin is a percentage corresponding to the ratio of EBITDA to sales. The adjusted adjusted EBITDA EBITDA margin is a percentage corresponding to the ratio of adjusted EBITDA to sales. margin  Free cash flows This measure correspon

  27. Slide 27: Non-IFRS Financial Measures (cont’d)

    Non-IFRS Financial Measures (cont’d) Reconciliation of consolidated Organic growth Third quarter YTD 2018 2017 2018 2017 FinishMaster US 214.2 206.5 626.5 615.7 Canadian Automotive Group 131.1 133.6 381.4 361.9 The Parts Alliance UK 103.5 55.7 324.6 55.7 Sales 448.8 395.8 1,332.5 1,033.3 % % Sales v

  28. Slide 28: Non-IFRS Financial Measures (cont’d)

    Non-IFRS Financial Measures (cont’d) Reconciliation of EBITDA and Adjusted EBITDA Third quarter YTD 2018 2017 % 2018 2017 % Net earnings 10.6 11.2 38.9 35.9 Income tax expense 3.8 7.7 8.7 19.8 Depreciation and amortization 10.0 8.3 29.4 19.7 Finance costs, net 5.3 5.0 15.2 9.5 EBITDA 29.7 32.2 (7.7%

  29. Slide 29: Non-IFRS Financial Measures (cont’d)

    Non-IFRS Financial Measures (cont’d) Reconciliation of Adjusted Earnings and Adjusted EPS Third quarter YTD 2018 2017 % 2018 2017 % Net earnings 10.6 11.2 (5.1%) 38.9 35.9 8.3% Special items, net of taxes 3.9 2.7 4.1 4.8 Amortization of the premium on foreign currency - 1.2 - 2.0 options, net of tax

  30. Slide 30: Non-IFRS Financial Measures (cont’d)

    Non-IFRS Financial Measures (cont’d) Reconciliation of Free cash flows Third quarter YTD 2018 2017 2018 2017 Cash flows from (used in) operating activities 72.6 48.8 81.2 78.5 Changes in working capital (36.6) (9.4) (3.8) 8.7 36.0 39.4 77.4 87.2 Acquisitions of property and equipment (4.1) (4.7) (10

  31. Slide 31: UNISELECT.COM

    UNISELECT.COM

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