Uni-Select — Q3 2021 Earnings Presentation
33 slides from Uni-Select's earnings presentation, Nov 12, 2021
Slide 1: Q3 2021 Conference Call
Q3 2021 (Ended September 30, 2021) Conference Call November 12, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements made in this press release are forward-looking information within the meaning of Canadian securities laws. All such forward looking information are made and disclosed in reliance upon the “safe harbour” provisions of applicable Canadian securities laws.
Slide 3: Q3 2021 Highlights
UNI-SELECT. Q3 2021 HIGHLIGHTS
Slide 4: The Path Forward
The Path Forward Align the 3 businesses with our vision Ongoing Focus on operational excellence Ongoing Identify opportunities for growth Ongoing Rebuild the leadership team Completed 4
Slide 5: Introducing the Leadership Team
Introducing the Leadership Team Highly complementary set of executives with diverse experience across industries Career Highlights Notable Accomplishments • Began career in automotive industry • Presided over an almost 2 decade of transformation of Brian McManus • 18 years as CEO of Stella-Jones Ste
Slide 6: Conso – Strong Profitability
Conso – Strong Profitability Sales (M$) EBITDA(1) & Adj. EBITDA(1)* (M$) EPS & Adj. EPS(1)* $451 $42.3 $426 $38.7 $395 $33.8 $0.40 9.9% $0.27 8.6% 8.5% $0.19 Q3-19 Q3-20 Q3-21 Q3-19 Q3-20 Q3-21 Q3-19 Q3-20 Q3-21 EBITDA Adj. EBITDA EPS Adj. EPS Organic Growth(1) Adj. EBITDA%(1) Adj. EPS(1) 3.9% / $15
Slide 7: Q3 2021 Segment Review
UNI-SELECT. Q3 2021 SEGMENT REVIEW
Slide 8: New Definition of Adj. EBITDA & Adj. EPS
New Definition of Adj. EBITDA & Adj. EPS The new definition now excludes stock-based compensation to better reflect core operational performance Adj. EBITDA(1) (M$) Adj. EPS(1) ($) 42.3 38.7 1.6 0.40 0.9 33.8 0.5 0.03 0.27 0.01 0.19 37.7 40.7 33.3 0.01 0.37 0.25 0.18 Q3-19 Q3-20 Q3-21 Q3-19 Q3-20 Q3
Slide 9: One-time Items Impacting EBITDA
One-time Items Impacting EBITDA $5.4M $2.4M for ongoing restructuring charges linked to improvement plans $3.0M for severance The bulk of planned one-time charges will occur by the end of 2021 9
Slide 10: FM – Ongoing Sequential Improvement
FM – Ongoing Sequential Improvement Sales (M$) EBITDA(1) & Adj. EBITDA(1)* (M$) • Sales up 7% driven by market recovery $171 $175 $163 $15.9 $155 $158 $13.7 • Organic growth(1) $10.1 continued its sequential $8.0 $8.4 9.1% improvement • Adj. EBITDA margin(1) 4.9% increased 420bps: (+) Increased sale
Slide 11: CAG – Recovery Continues
CAG – Recovery Continues • Sales increased 5.3%: Sales (M$) EBITDA(1) & Adj. EBITDA(1)* (M$) (+) FX (+) Acquisitions $145 $144 (-) Organic growth(1) $137 $19.0 $17.9 $16.8 $125 $115 $13.5 • Organic growth(1) 13.9% $12.0 decreased 1% due to 11.6% exceptional performance in Q3-20 • Adj. EBITDA(1) marg
Slide 12: TPA – Sustained Improvements
TPA – Sustained Improvements Sales (M$) EBITDA(1) & Adj. EBITDA(1)* (M$) • Sales var. +12.8%: $107 (+) FX $95 $97 $100 $11.0 (+) Organic growth(1) $87 $10.0 $8.8 $8.4 10.3% • Organic growth(1) $6.7 continues to improve 9.3% sequentially • Adj. EBITDA margin(1) up Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 100bps
Slide 13: Q3 2021 Liquidity & Capital Resources
Q3 2021 LIQUIDITY & CAPITAL RESOURCES 13
Slide 14: Strong FCF
Strong FCF • Year-over-year CFO(1) & CFO(1) (M$) Free Cash Flows(2) (M$) FCF(2) impacted by $61 rightsizing of inventory $62 in 2020 $48 $46 $43 $43 $41 $37 • CFO(1) down $19M: • Improvement in operating results • Right-sizing of ($1) ($6) working capital in Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q3-20 Q4-20
Slide 15: Sequential Improvement in Debt & Leverage
Sequential Improvement in Debt & Leverage Total Net Debt(1)(2) Total Net Debt (1) to Adj. EBITDA(1)* • Total net debt (1) decreased due to: 4.2x • Active cash management 397 4.0x 370 383 3.7x • Improved profitability 348 97 98 315 2.8x 101 98 98 2.3x • Leverage ratio decreased to 2.3x in Q3-21 due t
Slide 16: Capital Structure Update
Capital Structure Update • First full quarter of benefits related to the revised credit facility (yoy savings of $3.5M when combined with the impact of lower debt levels) Leveraging our improved • Partial repayment of the term loan for $35M financial position to reducing the credit facility to $465M
Slide 17: Conclusion
UNI-SELECT. CONCLUSION 17
Slide 18: Concluding Remarks
Concluding Remarks • Pleased with Q3-21 results • Operational improvements taking hold • Major savings on financing • Reduced total net debt • Cautious about Q4-21 results • Ongoing supply chain issues • Labor issues • Management anticipates higher adjusted EBITDA and adjusted EPS in fiscal 2022 com
Slide 19: Appendix – Impact of new definition of Adj. EBITDA and Adj. Earnings
APPENDIX – Impact of new definition of Adj. EBITDA and Adj. Earnings 19
Slide 20: Impact of New Definition on Adj. EBITDA
Impact of New Definition on Adj. EBITDA Consolidated Results (in millions $) Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 EBITDA(1) 21.4 31.7 51.4 (28.0) 15.1 (2.7) 30.8 21.5 24.8 0.5 35.3 Adjusted 28.5 35.8 37.7 27.9 16.8 14.8 33.3 23.9 28.2 34.1 40.7 EBITDA(1) (old) Stock-base
Slide 21: Impact of New Definition on Adj. EBITDA
Impact of New Definition on Adj. EBITDA FinishMaster (in millions $) Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 EBITDA(1) 11.1 17.8 20.3 14.5 11.3 (1.5) 6.5 8.2 9.7 (7.7) 14.0 Adjusted 16.4 19.0 21.4 16.4 12.1 4.5 7.9 8.4 10.1 13.2 15.9 EBITDA(1) (old) Stock-based (0.1) - (0.1
Slide 22: Impact of New Definition on Adj. EBITDA
Impact of New Definition on Adj. EBITDA The Canadian Automotive Group (in millions $) Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 EBITDA(1) 7.8 16.0 31.6 5.6 2.3 7.3 19.0 12.7 11.7 17.2 16.2 Adjusted 8.7 16.6 12.6 9.2 2.7 12.9 19.1 13.4 11.8 17.7 16.7 EBITDA(1) (old) Stock-base
Slide 23: Impact of New Definition on Adj. EBITDA
Impact of New Definition on Adj. EBITDA The Parts Alliance UK (in millions $) Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 EBITDA(1) 7.2 3.1 3.4 5.1 4.7 (4.9) 8.7 6.7 9.9 5.6 10.8 Adjusted 7.2 3.1 6.5 5.2 4.7 0.3 8.7 6.7 9.9 8.3 10.8 EBITDA(1) (old) Stock-based 0.1 - - - 0.1 0.1
Slide 24: Impact of New Definition on Adj. Earnings
Impact of New Definition on Adj. Earnings Consolidated Results (in millions $) Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Net Earnings(1) (1.3) 6.3 24.6 (49.4) (6.7) (24.2) 4.5 (5.1) 0.2 (20.3) 11.9 Adjusted 5.1 10.4 10.7 4.6 (4.3) (9.7) 7.5 (1.4) 3.7 8.8 16.1 Earnings(1) (old
Slide 25: Appendix – Reconciliation of Non-GAAP measures
APPENDIX – Reconciliation of Non-GAAP measures 25
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures The information included in this presentation contains certain financial measures that are inconsistent with GAAP. Non-GAAP financial measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented
Slide 27: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) Management uses adjusted earnings and adjusted earnings per share to assess net earnings and net earnings per share from operating activities, containing certain adjustments, net of income taxes, which may affect the comparability of the Corporation’s financial r
Slide 28: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) This measure consists of long-term debt, including the portion due within a year (as shown in note 12 to the Total net debt interim condensed consolidated financial statements), net of cash. Total net debt to This ratio corresponds to total net debt divided by ad
Slide 29: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) Reconciliation of Consolidated Organic Growth Third quarters YTD 2021 2020 2021 2020 FinishMaster U.S. 174.9 163.5 504.3 449.1 Canadian Automotive Group 144.5 137.2 404.9 360.5 The Parts Alliance U.K. 106.7 94.6 303.4 246.0 Sales 426.1 395.4 1,212.6 1,105.6 (in %
Slide 30: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) During the third quarter, the Corporation updated its definition of adjusted EBITDA and is now excluding stock-based compensation to better reflect the operational performance. Accordingly, the comparative figures were adjusted to reflect this change. Reconciliat
Slide 31: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) During the third quarter, the Corporation updated its definition of adjusted earnings and adjusted EPS and is now excluding stock-based compensation to better reflect the core operational performance. Accordingly, the comparative figures were adjusted to reflect
Slide 32: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) The Free Cash Flows definition was reviewed in Q2-21 and comparative figures were adjusted accordingly. Reconciliation of Free Cash Flows Third quarters YTD 2021 2020 2021 2020 Cash flows from operating activities 42.9 62.1 85.6 84.3 Advances to merchant members
Slide 33: Uni-Select
UNI-SELECT. UNISELECT.COM