Boyd Group Services Inc · TSX:BYD
Boyd Group Services — Investor Presentation (January 2022)
34 slides from Boyd Group Services's investor presentation, January 2022
Slide 1: Boyd Group Services Inc. Investor Presentation January 2022
BOYD GROUP SERVICES INC. Investor Presentation January 2022 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements, other than historical facts, which reflect the view of the Company's management with respect to future events. Such forward-looking statements reflect the current views of the Company's management and are made on the b
Slide 3: Capital Markets Profile
Capital Markets Profile (as at January 3, 2022) Stock Symbol: TSX: BYD.TO Shares Outstanding: 21.5 million Price (January 3, 2021): C$199.62 52-Week Low / High: C$183.00/$267.00 Market Capitalization: C$4,286.3 million Annualized Dividend (per share): C$0.576 Current Yield: 0.3% 3
Slide 4: Company Overview
Company Overview • Leader and one of the largest operators of collision repair shops in North America by number of locations (non-franchised) • Consolidator in a highly fragmented US$36.9 billion market • Second largest retail auto glass operator in the U.S. • Only public company solely focused on a
Slide 5: Collision Operations
Collision Operations • 841 company operated collision locations across 31 U.S. states and 5 Canadian provinces • Operate full-service repair centers offering collision repair, glass repair and replacement services • Strong relationships with insurance carriers • Process improvement initiatives 5
Slide 6: North American Collision Repair Footprint
North American Collision Repair Footprint Canada • • Ontario (84) British Columbia (17) 132 locations • Alberta (14) • Manitoba (13) • Saskatchewan (4) Note: The above numbers include 35 intake locations. U.S. • Michigan (74) • Louisiana (14) 709 locations • Illinois (71) • Kansas (13) • Florida (69
Slide 7: Glass Operations
Glass Operations • Retail glass operations across 35 U.S. states ▪ Asset light business model • Third-Party Administrator (“TPA”) business that offers glass, emergency roadside and first notice of loss services with approximately: ▪ 5,500 affiliated glass provider locations ▪ 15,000 affiliated roads
Slide 8: North American Glass Footprint
North American Glass Footprint U.S. • Alabama • Nevada • Arizona • New Hampshire • California • New York • Colorado • North Carolina • Connecticut • Ohio • District of Columbia • Oklahoma • Florida • Oregon • Georgia • Pennsylvania • Idaho • Rhode Island • Illinois • Tennessee • Indiana • Texas • Ke
Slide 9: Market Overview & Business Strategy
Market Overview & Business Strategy 9
Slide 10: Large, Fragmented Market
Large, Fragmented Market U.S. Collision Repair Market • Revenue for North American collision repair industry is estimated to be approximately US$36.9 billion annually (U.S. $34.6B, CDA $2.3B) • 31,400 shops in the U.S., 4,320 shops in Canada • Composition of the collision repair market in the U.S.:
Slide 11: Evolving Collision Repair Market
Evolving Collision Repair Market • Large multi shop collision repair operator (“MSO”) market share opportunity ▪ The top 3 consolidators represent an 18.2% share of collision repair revenue in 2020 as compared to 18.8% in 2019 and only 1.7% in 2006. ▪ 90 MSOs had revenues of $20 million or greater i
Slide 12: Strong Relationships with Insurance Companies through DRPs
Strong Relationships with Insurance Companies through DRPs • Direct Repair Programs (“DRPs”) are established between insurance companies and collision repair shops to better manage auto repair claims and the level of customer satisfaction • Auto insurers utilize DRPs for a growing percentage of coll
Slide 13: Insurer Market Dynamics
Insurer Market Dynamics Top 10 Insurer Market Share (U.S.) Insurer DRP Usage Other Insurers 26.5% Other 38.0% DRP Top 10 62.0% Insurers 73.5% Source: The Romans Group, 2020 13
Slide 14: Impact of Collision Avoidance Systems
Impact of Collision Avoidance Systems • CCC estimates technology will * reduce accident frequency by ~30% in next 25-30 years • As per industry studies, decline should be somewhat offset by increases in average cost of repair (increased expense of technology) and vehicle miles driven • Large operato
Slide 15: Business Strategy
Business Strategy Expense management Operational excellence Enhance SHARE Shareholder THE BOYD HOLDERS GROUP Value Same-store sales growth New location and and optimize returns from acquisition growth existing operations 15
Slide 16: Operational Excellence
Operational Excellence • Best-in-Class Service Provider ▪ Average cost of repair ▪ Cycle time ▪ Customer service ▪ Quality ▪ Integrity • “WOW” Operating Way ▪ Embedded as part of our operating culture • Company-wide diagnostic repair scanning and calibration technology • I-Car Gold Class facilities
Slide 17: Expense Management: Operating Expenses as % of Sales
Expense Management Well managed operating expenses as a % of sales Pre-IFRS 16 Post-IFRS 16 40.0% 35.0% 37.1% 36.8% 36.5% 35.9% 31.4% 32.0% Operating Expenses as % of Sales 35.0% 30.0% 30.0% 25.0% 25.0% 20.0% 20.0% 15.0% 15.0% 10.0% 10.0% 5.0% 5.0% 0.0% 0.0% 2015 2016 2017 2018 2019 2020 *Results fo
Slide 18: SSSG - Optimizing Returns from Existing Operations
SSSG - Optimizing Returns from Existing Operations Same-store sales increases in 31 of 40 most recent quarters 35% 10-year average SSSG: 4.5%* 5-year average SSSG: 4.0%* 30% 3-year average SSSG: 3.2%* Same-Store Sales Growth** 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% -35% Q1-11 Q2-11 Q3-11
Slide 19: Focus on Accretive Growth
Focus on Accretive Growth • Goal: double the size of the business during the five-year period from 2021 to 2025, based on 2019 revenues, on a constant currency basis • Implied compound average annual growth rate of 15%: • Same-store sales • Acquisition or development of single locations • Acquisitio
Slide 20: Strong Growth in Collision Locations
Strong Growth in Collision Locations 140 900 841 800 120 700 100 600 80 500 60 127 400 105 108 300 40 81 64 58 200 54 20 42 29 100 0 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 Annual additions Total Locations *Results for 2020 were severely impacted by the COVID-19 Pandemic 20
Slide 21: Financial Review
Financial Review THE pp Boyd GROUP
Slide 22: Revenue Growth
Revenue Growth (C$ millions) $2,500 $2,283.3 $2,089.1 $2,000 $1,864.6 $1,569.4 $1,500 $1,387.1 $1,000 $500 $0 2016 2017 2018 2019 2020 *Results for 2020 were severely impacted by the COVID-19 Pandemic 22
Slide 23: Pre-IFRS 16 Adjusted EBITDA Growth
Pre-IFRS 16 - Adjusted EBITDA Growth (C$ millions) $300 $250 $215.6 $200 $173.4 $145.6 $150 $124.3 $101.7 $100 $50 $0 2015 2016 2017 2018 2019 *Adjusted EBITDA for 2019 is shown on a Pre-IFRS 16 basis for comparative purposes. 23
Slide 24: Post-IFRS 16 Adjusted EBITDA
Post-IFRS 16 - Adjusted EBITDA (C$ millions) 1-YR Decline of 8.23% $319.9 $293.6 $300 $250 $200 $150 $100 $50 $0 2019 2020 *IFRS 16 was adopted effective January 1, 2019 **Results for 2020 were severely impacted by the COVID-19 Pandemic 24
Slide 25: Q3 2021 Financial Summary
Q3 2021 Financial Summary 3-months ended 9-months ended (US$ millions, except per share and percent amounts) Sept 30, Sept 30, Sept 30, Sept 30, 2021 2020 2021 2020 Sales $490.2 $381.7 $1,356.5 $1,157.5 Gross Profit $215.7 $180.3 $614.8 $533.9 Adjusted EBITDA* $51.5 $63.5 $162.2 $159.6 Adjusted EBIT
Slide 26: Canadian Emergency Wage Subsidy (CEWS)
Canadian Emergency Wage Subsidy ("CEWS") • CEWS was put into place on April 11, 2020 and remained in place until October 23, 2021 • The amount of the CEWS has decreased as the program phases out • As is the objective of the program, Boyd has been able to retain more of its employees than would have
Slide 27: Strong Balance Sheet
Strong Balance Sheet (in US$ millions) Sept 30, 2021 Dec 31, 2020 Cash $31.2 $61.0 Long-Term Debt $385.1 $180.2 Net Debt before lease liabilities (total debt, including current portion and bank $353.9 $119.2 indebtedness, net of cash) Lease liabilities $543.0 $419.3 Total debt, net of cash $896.9 $5
Slide 28: Financial Flexibility
Financial Flexibility • Cash of US$31.2 million • Net Debt to EBITDA TTM ratio of 2.8x • Over US$500 million in cash and available credit • Only public company in the industry: access to all capital markets 28
Slide 29: Dividends
Dividends Annualized dividends have increased by 9.1% since 2017 Annualized Dividend per Share (C$) $0.60 0.576 0.564 0.552 $0.55 0.54 0.528 $0.50 $0.45 $0.40 Nov 17 - Oct 18 Nov 18 - Oct 19 Nov 19 - Oct 20 Nov 20 - Oct 21 Nov 21 - Present 29
Slide 30: Five-year Return to Shareholders
Five-year Return to Shareholders Boyd Group S&P/TSX Composite 250% 5-year total return: 200% 138.07%* 150% 100% S&P/TSX Composite 39.29% 50% 0% -50% 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 *Source: Irwin. Total return based on reinvestment of dividends. 30
Slide 31: Delivering long-term value to shareholders
Delivering long-term value to shareholders • Best or second best 10-year performance on the TSX for 6 consecutive years • Best 10-year performance on the TSX in 2015 and 2016 • Second best 10-year performance on the TSX in 2017, 2018, 2019 and 2020 +9966.5% 10-year Total Return +5795.6% +5901.2% +42
Slide 32: Experienced & Committed Management Team
Experienced & Committed Management Team Timothy O’Day Narenda “Pat” Pathipati President & CEO Executive Vice-President & CFO 32
Slide 33: Outlook
Outlook • Boyd has taken specific actions to enhance the sales and margin opportunities, including: • Investing in and growing our Technician Development Program • Increasing recruitment support staff to improve lead generation and follow-up • Proactively evaluating compensation levels and making ap
Slide 34: Summary
Summary ✓ Strong balance sheet Stability ✓ Insurer preference for MSOs ✓ Recession Resilient + ✓ US$36.9 billion fragmented industry ✓ High ROIC growth strategy Growth ✓ Market leader/consolidator in North America = ✓ Cash dividends/conservative payout ratio Shareholder Value ✓5-year total sharehold
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