Monro, Inc. · NASDAQ:MNRO
Monro — Investor Presentation (November 2019)
29 slides from Monro's investor presentation, November 2019
Slide 1: Monro, Inc. Investor Presentation November 2019
Monro, Inc. Investor Presentation November 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 ▪ 1,271 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: Second Quarter Fiscal 2020 Highlights
Second Quarter Fiscal 2020 Highlights Achieved Record Sales of $324.1 Million, Up 5.5% Year-Over-Year 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% 2QFY19 3QFY19 1 4QFY19 1 1QFY20 2QFY20 0.0% -0.5% 2QFY19 3QFY1
Slide 9: A Scalable Platform: Recent Acquisitions
A Scalable Platform: Recent Acquisitions Acquisitions Announced and Completed in Fiscal 2020 Represent $120M in Annualized Sales Announced Acquisitions ▪ Announced definitive agreement to acquire 18 retail locations, including 14 in Nevada and four in Idaho ▪ Represents two new states and further ex
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 Online Reputation ❑ Improve SEO and local listing management Management ❑ Effectively build and manage online presence ❑ Deliver a best-in-class experience to all customers Consistent In-Store ❑ Provide clear product choices and quality service to Delivering a Five-Star E
Slide 12: Store Refresh & Brand Consolidation Initiative
Store Refresh & Brand Consolidation Initiative Making Strong Progress as Store Refresh/Rebrand Program Is Rolled Out Across Base ❑ 159 stores in various stages of change during 2QFY20 ❑ Double-digit increase in same store sales at pilot locations reinforces strength of store refresh/rebrand strategy
Slide 13: Store Refresh Transformation Timeline
Store Refresh Transformation Timeline 7 Stage Transformation Process from Beginning to End Takes ~17 Weeks BEFORE AFTER Store Team Trained Store Interior Remodel Store Exterior Painted Store Readiness Parts Inventory Store Inventory Storage Inventory Assortment on New Operating and Technology and Ne
Slide 14: Performance Post-Store Refresh Program
Performance Post-Store Refresh Program Strong Performance of Refreshed Stores Driving Confidence In Strategy Comp Sales Comp Sales Stores Performance Performance Store Breakdown Prior to Refresh1 Post-Refresh Group 1 (Pilot) - 42 Comp Stores + LSD % ~ + 14%2 44 Stores - 2 Non Comp Stores Group 2 - 1
Slide 15: Store Refresh & Brand Consolidation Initiative
Store Refresh & Brand Consolidation Initiative Store Refresh Program On Track To Be Rolled Out Across Base Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Group 1 44 stores Group 2 43 stores Group 3 116 stores Group 4 ~80 stores Group 5 ~70 stores Group 6 ~70 stores 1
Slide 16: 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 17: Omnichannel: Amazon.com Collaboration
Omnichannel: Amazon.com Collaboration Collaboration With Amazon.com Supports Monro’s Online Tire Retailers Installation Strategy Expanded Amazon.com Collaboration ▪ Monro’s tire installation services available to customers who purchase tires online from Amazon.com and select the Ship-to- Store optio
Slide 18: 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 Approach ❑ Educate customers on new tire installation, brake and oil change service options ❑ Improve tire sales strategy to off
Slide 19: 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 20: Monro.Forward Progress Update
Monro.Forward Progress Update Monro.Forward Initiatives Well Underway and Continuing to Advance ❑ Executing customer satisfaction and online reputation management program across Improve Customer Monro’s store base Experience ❑ Focus on the in-store experience is having significant impact on Company
Slide 21: 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 22: 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 23: Second Quarter Fiscal 2020 Results
Second Quarter Fiscal 2020 Results Achieved Record Sales of $324.1 Million, Up 5.5% Year-Over-Year 2QFY20 2QFY19 Δ 1HFY20 1HFY19 Δ Sales (millions) $324.1 $307.1 5.5% $641.2 $602.9 6.3% Same Store Sales 0.0% 3.2% (320 bps) 0.4% 2.5% (210 bps) Gross Margin 37.7% 39.1% (140 bps) 39.0% 39.3% (30 bps) O
Slide 24: Fiscal 2020 Outlook
Fiscal 2020 Outlook Updates Fiscal 2020 Comparable Store Sales and EPS Guidance Ranges1 Operating Margin FY20 FY19 Δ ▪ Assumes operating margin of ~10.6% at midpoint of FY20 sales guidance Sales (millions) $1,295 to $1,315 $1,200 7.9% to 9.6% ▪ Expect relatively stable tire and oil costs year-over-y
Slide 25: Disciplined Capital Allocation
Disciplined Capital Allocation Executing on Growth Strategy While Maintaining a Disciplined Approach to Capital Allocation Investing in the Business ▪ 1HFY20 capex of $23.8M ▪ Continue to expect ~$75M of incremental Capex over 5 years to invest in store re-image and technology Executing on M&A Oppor
Slide 26: 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 27: Appendix
Appendix 27
Slide 28: Monro.Forward: Investments in Technology
Monro.Forward: Investments in Technology Significant Investments in Technology to Support Monro.Forward Strategy Area Strategic Rationale Timing • Launched in Q4 FY18 Business Intelligence • KPI dashboards for stores and management • Ongoing company-wide expansion • Ensures consistent onboarding and
Slide 29: 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 Pilot store refresh & Scale store refresh & operational operational excellence excellence Improve Customer Experience Technology based in-store experience Scheduled maintenance in-store selling