Monro, Inc. · NASDAQ:MNRO
Monro — Investor Presentation (February 2019)
29 slides from Monro's investor presentation, February 2019
Slide 1: Monro, Inc. Investor Presentation
Monro, Inc. Investor Presentation February 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 adjacent markets Fiscal 2018 sales of $1,127.8 million 1,197 company operated stores in 28 states and 99 franchised locat
Slide 4: A Strong Brand Portfolio
A Strong Brand Portfolio Multiple Store Brand Strategy Driving Increased Store Density 10 well-known regional brands underneath Monro’s corporate umbrella Brand Portfolio Operating two store formats in key markets − Service stores – 560 stores Service Tire • 80% maintenance services, 20% tires •
Slide 5: 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 The following types of parts are sourced from various cities in China: Brake Rotors and Pads Filters Steering and Suspension Wipers Belts
Slide 6: 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 U.S. Annual Light Vehicle Sales U.S. Light Vehicles in Operation (VIO) 18 300 290 16 280 270 14 260 250 12 240 230 10 220 210 8 200
Slide 7: 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 8: A Favorable Industry Backdrop
A Favorable Industry Backdrop Monro Operates in the $230 Billion Do-It-For-Me* Segment of $287 Billion U.S. Automotive Aftermarket Industry Automotive Aftermarket DIFM vs. DIY Sales 2008 % (outlets) 2016 % (outlets) CAGR 300,000 250,000 Dealers 20,770 15.6% 16,680 12.7% (2.7%) 200,000 General Repair
Slide 9: Third Quarter Fiscal 2019 Highlights
Third Quarter Fiscal 2019 Highlights Achieved Fourth Consecutive Quarter of Positive Comparable Store Sales Growth Y/Y Comps Trends Quarterly Comps Trends 10.0% 4.0% 8.0% 3.0% 6.0% 2.0% 4.0% 1.0% 2.0% 0.0% 1 2 3 0.0% 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 1 2 2 3 -1.0% Jan-18 Feb-18 Mar-18 Apr-18 May-18
Slide 10: A Scalable Platform: Recent Acquisitions
A Scalable Platform: Recent Acquisitions Acquisitions Completed and Announced to Date in Fiscal 2019 Represent $87M in Annualized Sales Announced Acquisitions Announced a definitive agreement to acquire 12 retail locations in Louisiana Enters a new state, expanding the Company’s presence in the
Slide 11: 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 12: 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 Experience
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: Omnichannel: Expanded Amazon.com Collaboration
Omnichannel: Expanded Amazon.com Collaboration Expanded 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 Sh
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 Approach Educate customers on new tire installation, brake 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 Clearly Defined Career Path managers and Enha
Slide 17: Monro.Forward Progress Update
Monro.Forward Progress Update Monro.Forward Initiatives Well Underway and Advancing as Planned Successfully implemented Monro playbook and store re-image initiative pilot at 31 locations in Rochester, NY during 3QFY19, leading to improved conversion and Improve Customer customer satisfaction Exper
Slide 18: Monro.Forward Progress Update (Cont.): Number of Reviews
Monro.Forward Progress Update (Cont.) Monro.Forward Initiatives Well Underway and Advancing as Planned Continuing to execute customer satisfaction and online reputation management Improve Customer program across Monro’s store base Experience Focus on the in-store experience is having significant
Slide 19: Monro.Forward Progress Update (Cont.)
Monro.Forward Progress Update (Cont.) Monro.Forward Initiatives Well Underway and Advancing as Planned Retail website driving increase in online appointments and mobile calls Enhance Customer- Expanding direct marketing through CRM platform following strong pilot campaigns Centric Engagement D
Slide 20: 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 2
Slide 21: 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 45 acquisitions in the last 16 fiscal years, encompassing 681 locations and $900 million of revenue 29 acquisitions in the past 6 fiscal years, adding 386 locations and $520 m
Slide 22: Strong Third Quarter Fiscal 2019 Results
Strong Third Quarter Fiscal 2019 Results Improving In-Store Execution Drove Strong Top-Line Performance 3QFY19 3QFY18 Δ FY19 YTD FY18 YTD Δ Sales (millions) $310.1 $285.7 8.5% $913.0 $842.2 8.4% Same Store Sales1 3.3% -3.1% 640 bps 2.8% -0.7% 350 bps Gross Margin 38.0% 37.4% 60 bps 38.9% 38.9% 0 bps
Slide 23: Fiscal 2019 Outlook
Fiscal 2019 Outlook Guide to Upper End of Fiscal 2019 Comparable Store Sales and Reiterate EPS Guidance Operating Margin Assumes operating margin of ~11% at midpoint of FY19 sales guidance FY19 FY18 Δ Expect stable tire and oil costs year-over-year Expect to generate earnings increase on a com
Slide 24: Fiscal 2019 Outlook – Capital Investment
Fiscal 2019 Outlook – Capital Investment Incremental Capital Spending Focused Primarily on Store Refresh Pilot Capital Investment Area Store Refresh Initiative (Capital Spending by Area, $ in Million) Renovation Plus Refresh Light $39.1 $43.0 100% 3.8 4.5 90% IT Infrastructure 1.7 5.8 80% Monro.Forw
Slide 25: Three-Year Organic Growth Financial Targets
Three-Year 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% 2.0% 2.0% 1.0% Operating Margin Return to 12%+ Operating Margin
Slide 26: Disciplined Capital Allocation
Disciplined Capital Allocation Executing on Growth Strategy While Maintaining a Disciplined Approach to Capital Allocation Investing in the Business Capex of $30.8M in the first nine months of fiscal 2019 Continue to expect ~$75M of incremental Capex over the next 5 years to invest in store re-i
Slide 27: 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 market position in Northeast, Great Lakes and Mid-Atlantic with a presence in 28 states 17 years of consecutive annual sales growth Low cos
Slide 28: Appendix
Appendix 28
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 Foundational technology & tools Scale store refresh & operational Pilot store excellence Improve Customer refresh & operational Technology based in-store experience Experience excellence Schedu