Monro, Inc. · NASDAQ:MNRO
Monro — Investor Presentation (May 2017)
25 slides from Monro's investor presentation, May 2017
Slide 1: Nasdaq: MNRO Updated May 2017
Updated May 2017 Nasdaq: MNRO 1
Slide 2: Forward Looking Information
Forward Looking Information Statements contained in these materials regarding Monro’s expectations with respect to future operations and other information, which can be identified by the use of forward looking terminology, such as “may,” “will,” “expect,” “project,” “anticipate,” “estimate” or “cont
Slide 3: Who We Are
Who We Are Zz C CLULCE
Slide 4: Company Overview
Company Overview • Largest chain of Company-operated undercar care facilities in the United States • As of March 25, 2017, the Company operated 1,118 stores in 27 states • Through Car-X acquisition in April 2015, the Company is franchisor to 113 franchised locations in 9 states and operates 28 Car-X
Slide 5: Geographic Presence
Geographic Presence DOMINANT IN THE NORTHEASTERN U.S., EXPANDING SOUTH Service Tire Stores Stores Tires Now Connecticut 35 Delaware 2 7 Florida 86 Georgia 13 Illinois 14 5 Indiana 11 29 Iowa 3 Kentucky 33 1 Maine 18 Maryland 9 65 Massachusetts 36 9 Michigan 21 Minnesota 4 Missouri 22 New Hampshire 9
Slide 6: Sales Mix
Sales Mix Gross Margin % (Retail) Brakes and Steering = +15 Maintenance and Exhaust = baseline company margin Tires = -10 FY15 FY16 FY17 Brakes Exhaust Steering Maintenance* Tires *Includes state inspections, lube, oil, filter, engine cooling service, scheduled maintenance and other. Note: Monro’s f
Slide 7: Competitive Advantages: Operating Model
Competitive Advantages Operating Model • Company-operated stores – Faster, Better, Cheaper – Centralized purchasing and distribution – Efficient marketing (database mailing, email, direct mail and internet) – Superior customer service • Pricing power and fixed cost leverage – Low cost operator 7
Slide 8: Competitive Advantages: Customer Value Proposition
Competitive Advantages Customer Value Proposition • Monro establishes relationships with customers based on TRUST • Direct marketing to customers fosters repeat business and long-term relationships • New, Monro Drive Card private label credit card expected to help increase traffic through higher cus
Slide 9: High Customer Satisfaction
High Customer Satisfaction Monro Website Internet Paid Ads •http://www.monro.com/Customer-Satisfaction-Rating 9
Slide 10: Industry Overview
Industry Overview Monro operates in $197 billion “Do-It-For-Me*” segment of $246 billion U.S. automotive aftermarket industry * Includes Replacement Tire Segment. U.S. Automotive Service Bay Population Aftermarket Industry Changes: 1999 – 2014 Total Bays / Mkt Share % (000’s) Do-It-For-Me: 1999 - 74
Slide 11: US Light Vehicle in Operations (VIO)
US Light Vehicle in Operations (VIO) VIO is expected to increase 9% by 2020 Source: IHS Automotive Biggest benefit to 6-10 year old group, Monro’s sweet spot. 11
Slide 12: Favorable Industry Trends
Favorable Industry Trends 260 million vehicles on road Vehicles in operation projected to increase over 9% during 2015 - 2020 Number of vehicles 6 years and older to increase Increasing age of vehicles (12.0 years) Significant average annual miles driven per vehicle Decreasing number of
Slide 13: Favorable Industry Trends
Favorable Industry Trends Cars and Light Trucks in Service Average Age of Car and Light Truck on the Road Age (in years) Source: IHS Automotive. Source: . November 2012 Lang Report, 2012 Wall Street Journal, June 2014 Lang Report and March and October 2015 and May 2016 The Lang Aftermarket iReport U
Slide 14: EPS Trends
EPS Trends % Change 178% 24% 17% 17% 22% 17% 12% (4)% 3% 20% 34% 35% 17% (22%) 27% 13% 6% ( 8%) 14-24% •Adjusted for three-for-two stock split paid to shareholders of record as of October 21, 2003, September 21, 2007 and December 13, 2010. •Note: Monro’s fiscal year end is March of each year. 14
Slide 15: Historical Financials
Historical Financials (Dollars in millions except per share data) Fiscal Year Fiscal Year Fiscal Year 2017 2016 2015 Sales $1,021.5 $943.7 $894.5 Sales Growth (vs. prior year) 8.3% 5.5% 7.6% EBITDA $ 161.6 $160.7 $146.4 EBITDA Margin 15.8% 17.0% 16.4% Operating Income $ 116.4 $120.6 $109.8 Operating
Slide 16: Balance Sheet Highlights
Balance Sheet Highlights Fiscal Y/E Fiscal Y/E March 25, 2017 March 26, 2016 Current assets $ 199,230 $170,075 Property, plant & equipment, net 394,634 351,582 Other non-current assets 591,400 477,781 Total assets $1,185,264 $999,438 Current liabilities $ 185,893 $167,571 Capital leases and financin
Slide 17: Growth Strategy
Growth Strategy Increase market share through same store sales growth Acquire competitors at attractive prices Continue new store openings in existing markets – Approximately 20 to 40 stores per year 17
Slide 18: Acquisitions and Opportunities
Acquisitions and Opportunities Building Tire Store Category Combination of 42 acquisitions in the last 15 years - 653 stores - $800 million revenue Could have up to 1,300 tire stores and 1,300 service stores in our 27 states - Creates market dominance and pricing power - Diversifies risk - Expan
Slide 19: Recent Acquisitions
Recent Acquisitions Kramer Tire (April 2012) Tire King (December 2012) • 20 stores in Virginia • 9 stores in North Carolina • 2011 sales - $25 million • 2011 sales - $11 million • Purchased real estate for four locations Colony Tire (June 2012) • 18 stores in North Carolina Curry’s Auto Service (Aug
Slide 20: Recent Acquisitions
Recent Acquisitions The Tire Choice (August 2014) Kost Tire and Windsor Tire (NY, PA, MA) • 35 stores in Florida (July/August 2015) • 2013 sales - $48 million • 31 stores in central New York, Pennsylvania and • Purchased real estate for five locations Massachusetts. Kost stores = 27 locations • 2014
Slide 21: FY18 Earnings Assumptions
FY18 Earnings Assumptions • Earnings estimate for FY18: $2.10 - $2.30 vs $1.85 in FY17 – Q1 FY18: $.52 - $.56 vs. $.50 Q1 FY17 • Comparable Store Sales increase of 2.0% to 4.0% for FY18 on a 52-week basis (4% to 6%, including extra week); ‒ Q1 FY18: 2.0% to 3.0% • Gross Sales approximately $1.125 bi
Slide 22: FY18 Other Assumptions
FY18 Other Assumptions • Interest Expense of $21 million • $46 million depreciation and amortization • EBITDA approximately $185 million • $38 million of cap-ex – $30 million in maintenance cap-ex – $8 million for new stores 22
Slide 23: FY18 Cash Flow Priorities
FY18 Cash Flow Priorities Acquisitions Same or contiguous markets Buy right Accretive to earnings in a reasonable timeframe Pay down debt 23
Slide 24: Investment Highlights
Investment Highlights Largest chain of Company-operated undercar care facilities in the U.S. Wide breadth of product and service offerings Superior customer service Favorable industry trends Leading market position in Northeast, Great Lakes and Mid-Atlantic with a presence in 27 states S
Slide 25: Nasdaq: MNRO Updated May 2017
Updated May 2017 Nasdaq: MNRO 25 25