Boyd Group Services Inc · TSX:BYD
Boyd Group Services — Shareholder Meeting (May 2019)
32 slides from Boyd Group Services's shareholder meeting presentation, May 15, 2019
Slide 1: Annual General Meeting May 15, 2019
Annual General Meeting May 15, 2019 1
Slide 2: Allan Davis, Independent Chair of the Board
Allan Davis Independent Chair of the Board 2
Slide 3: Meeting Agenda
Meeting Agenda • Introduction • Audited Financial Statements • Scrutineer’s Report • Appointment of Trustees • Nominees as Trustees/Directors of BGI & BGHI • Appointment of Auditors • Advisory vote/Say on Pay • Management Presentation • Q&A 3
Slide 4: Brock Bulbuck, Chief Executive Officer
Brock Bulbuck Chief Executive Officer 4
Slide 5: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements, other than historical facts, which reflect the view of the Fund's management with respect to future events. Such forward-looking statements reflect the current views of the Fund's management and are made on the basis o
Slide 6: 2018 Highlights
2018 Highlights • Added 81 locations, representing 16% growth in new locations and entered four new states: Alabama, Missouri, Texas, and Wisconsin • Total sales increased 18.8% to $1.9 billion including same-store sales increase of 4.8%* • • Adjusted EBITDA increased 19.1% to $173.4 million Consist
Slide 7: Financial Performance
Financial Performance (C$ millions) Sales Adjusted EBITDA Adjusted Net Earnings 2,000 1,865 200 90 86 1,800 180 173 80 1,569 1,600 160 1,387 146 70 1,400 140 59 124 60 1,200 53 120 50 1,000 100 40 800 80 30 600 60 400 40 20 200 20 10 0 0 0 2016 2017 2018 2016 2017 2018 2016 2017 2018 Note: Adjusted
Slide 8: Strong Balance Sheet
Strong Balance Sheet (C$ millions) Equity Net Debt/ Adjusted EBITDA (x) 571 1.41 1.34 440 0.89 281 2016 2017 2018 2016 2017 2018 8
Slide 9: Total Location Growth
Total Location Growth New Locations 120 • Added 81 locations 105 100 • Entered 4 new states 81 • Market remains fragmented and 80 continues to provide attractive 58 acquisition opportunities 60 40 20 0 2016 2017 2018 9
Slide 10: Distributions
Distributions Annualized distributions have increased by 9.8% since 2014 Annualized Distribution per Unit (C$) $0.55 0.540 0.528 0.516 0.504 $0.50 0.492 $0.45 $0.40 Nov 14 - Nov 15 - Nov 16 - Nov 17 - Nov 18 - present Oct 15 Oct 16 Oct 17 Oct 18 1010
Slide 11: Return to Unitholders - 2018
Return to Unitholders - 2018 Boyd Group Income Fund S&P/TSX Composite S&P/TSX Income Trust 40.0% 2018 30.0% total return: +12.0% (+12.5% including 12.5%* distributions) 20.0% 10.0% -7.0% (-1.9% including dividends) 0.0% -11.6% -10.0% (-8.9% including dividends) -20.0% 31-Dec-17 28-Feb-18 30-Apr-18 3
Slide 12: Five-year Return to Unitholders
Five-year Return to Unitholders Boyd Group S&P/TSX Composite S&P/TSX Income Trust 350% 5-year 300% total return: 250% 253.84%* 200% 150% S&P/TSX Income Trust 100% 41.1% 50% 0% S&P/TSX Composite -50% 22.0% 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 *Source: Thomson Reuters Eikon. Tot
Slide 13: Delivering long-term value to unitholders
Delivering long-term value to unitholders • Best 10-year performance on the TSX in 2015 and 2016 • Second best 10-year performance on the TSX in 2017 and 2018 S&P/TSX Composite Index BYD.UN +9,966.5% +5,795.6% 5,901.2% +118% +58.6% +57.5% 2006 - 2016 2007 - 2017 2008 - 2018 *Source: Thomson Reuters
Slide 14: Average Daily Trading
Average Daily Trading 80,000 $14.0 74,674 70,000 $12.0 63,454 60,116 60,000 $9.9 $10.0 50,000 $8.0 40,000 $6.6 $6.0 30,000 $4.0 20,000 $2.8 10,000 $2.0 0 $0.0 2016 2017 2018 Average Daily Volume Average Daily Value ($M) *Source: TSX Infosuite 14
Slide 15: Financial Review
Financial Review 15
Slide 16: 2018 Sales
2018 Sales (C$ millions) 2,000 1,865 1,800 1,600 1,569 +18.8% 1,400 1,200 1,000 • + $234.9 million: 174 new locations 800 • + $69.0 million: same-store sales growth 600 400 • - $2.3 million: U.S. exchange rate conversion of same-store sales 200 0 • - $6.4 million due to closure of under- 2017 2018 p
Slide 17: 2018 Adjusted EBITDA
2018 Adjusted EBITDA (C$ millions) 180 173 +19.1% 170 160 150 146 140 • Increase primarily due to 130 incremental EBITDA contribution 120 from new location and same-store sales growth 110 • Changes in U.S. dollar exchange 100 2017 2018 rates increased Adjusted EBITDA by $0.5 million 17
Slide 18: 2018 Adjusted Net Earnings
2018 Adjusted Net Earnings (C$ millions) 90 86 +45.5% 80 70 59 60 50 40 30 • Adjusted Net Earnings increased due to 20 lower U.S. income tax expense, 10 reduced finance costs and contributions from new locations and 0 2017 2018 same-store sales growth, partially offset by enhanced benefits for U.S.
Slide 19: 2018 Adjusted Distributable Cash
2018 Adjusted Distributable Cash (C$ millions) 180 +63.9% 160 155 140 120 100 94 80 60 • Increase due to higher cash flow from operations resulting from the 40 growth of the company 20 0 • Payout ratio of 6.8% for the year 2017 2018 19
Slide 20: Q1 2019 Financial Summary
Q1 2019 Financial Summary 3-months ended (C$ millions, except per unit and percent amounts) March 31, March 31, 2019 2018 Sales $557.9 $453.3 Gross Profit $253.0 $204.5 Adjusted EBITDA* $54.2 $42.1 Adjusted EBITDA Margin* 9.7% 9.3% Adjusted Net Earnings* $29.2 $20.9 Adjusted Net Earnings* per unit $
Slide 21: IFRS 16 Impact
IFRS 16 Impact IMPACT OF IFRS 16 ON NET EARNINGS, CASH FLOWS & DISTRIBUTABLE CASH $(000's)Cdn Q1 2019 IFRS 16 Q1 2019 Statement of Earnings As reported Adjmt Pre-IFRS 16 Sales 557,897 - 557,897 Cost of sales 304,914 - 304,914 Gross profit ($) 252,983 - 252,983 Operating expenses 174,661 24,147 198,8
Slide 22: Strategy & Outlook
Strategy & Outlook 22
Slide 23: Business Strategy
Business Strategy Operational Expense excellence management Enhance UNIT Unitholder THE BOYD HOLDERS GROUP Value Same-store sales growth and optimize returns New location and from existing operations acquisition growth 2323
Slide 24: Operational Excellence
Operational Excellence • Best-in-Class Service Provider Average cost of repair Quality Cycle time Integrity Customer service • “WOW” Operating Way Embedded as part of our operating culture • Company-wide diagnostic repair scanning technology • I-Car Gold Class facilities • Industry leade
Slide 25: Operating Expenses as % of Sales
Expense Management Well managed operating expenses as a % of sales 45.0% 40.0% 38.8% 38.0% 37.1% 36.8% 36.5% 35.9% Operating Expenses as % of Sales 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2013 2014 2015 2016 2017 2018 2525
Slide 26: Same-Store Sales Growth
SSSG - Optimizing Returns from Existing Operations Same-store sales increases in 33 of 40 most recent quarters 10-year average SSSG: 4.0% 5-year average SSSG: 4.9% 13% Same-Store Sales Growth* 3-year average SSSG: 3.8% 8% 3% -2% -7% Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11**
Slide 27: Strong Growth in Collision Locations
Strong Growth in Collision Locations 120 700 621 600 100 105 500 80 81 400 60 64 58 300 40 46 200 20 42 29 100 0 0 2013 2014 2015 2016 2017 2018 YTD 2019 Annual additions Total locations • May 2013: acquisition of Glass America added 61 retail auto glass locations • March 2016: acquisition of 4 reta
Slide 28: Outlook
Outlook • Increase North American presence through: Drive same-store sales growth through enhanced capacity utilization, development of DRP arrangements and leveraging existing major and regional insurance relationships Acquire or develop new single locations as well as the acquisition of multi-
Slide 29: Summary
Summary Strong balance sheet Stability Insurer preference for MSOs Recession resilient + US$38.6 billion fragmented industry High ROIC growth strategy Growth Market leader/consolidator in North America = Cash distributions/ Unitholder Value conservative payout ratio 5-year total unith
Slide 30: Boyd Income Fund
p=) Boyd INCOME FUND
Slide 31: Impact of Collision Avoidance Systems
Impact of Collision Avoidance Systems • CCC estimates technology will reduce Impact of Crash Avoidance on Vehicle accident frequency by ~30% in next 25- Claim Counts * 30 years -31% CY 2050 • Collision avoidance technology may -30% CY 2045 lessen the extent of damage in some -29% CY 2040 accidents,
Slide 32: Annual General Meeting May 15, 2019
Annual General Meeting May 15, 2019 32