Frontdoor, Inc. · NASDAQ:FTDR
Frontdoor — Q4 2019 Earnings Presentation
22 slides from Frontdoor's earnings presentation, Feb 26, 2020
Slide 1: Fourth-Quarter & Full-Year 2019 Earnings Webcast
Fourth-Quarter & Full-Year 2019 Earnings Webcast FEBRUARY 26, 2020
Slide 2: Today's Speakers
Today’s Speakers Rex Tibbens Brian Turcotte Matt Davis President & Senior Vice President & Vice President Chief Executive Officer Chief Financial Officer Investor Relations & Treasurer
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, projected future performance and any statements
Slide 4: Full-Year 2019 Summary
Full-Year 2019 Summary • Improved Business Processes • Implemented New Systems • Strengthened Leadership Team • Introduced Dynamic Pricing • Launched Candu • Acquired Streem 4
Slide 5: e GRRE MODEL «
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Slide 6: Book a Candu Pro to fix
MW 4 8 = Book a Candu Pro to fix Applianca your Kitchen Aid oven. bh Price based on similar repairs in your area. done right. SERVICE OPTION A im fea) Book Service in Your Area Flat Fee Price $230 ™ ($79 Upfront) al) iS) sew be added a cacout sega wanes Cost to repair your oven includes parts & labo
Slide 7: 2020 Objectives
2020 Objectives Transform Drive Top-Line Advance Continue Customer Growth Operational Technology Experience Efficiencies Evolution 7
Slide 8: Q4 2019 Financial Summary
Q4 2019 Financial Summary $ millions Revenue Net Income Adjusted EBITDA(1) +7% +11% +3% $47 $48 $300 $19 $279 $17 2018 2019 2018 2019 2018 2019 1 See the Appendix accompanying this presentation for a reconciliation of Adjusted EBITDA, a non-GAAP measure, to the nearest GAAP measure. See “Reconciliat
Slide 9: Q4 2019 Adjusted EBITDA Bridge
Q4 2019 Adjusted EBITDA(1) Bridge $ millions Three Months December 31, 2018 $47 Impact of change in revenue(2) 16 Contract claims costs (1) Sales, marketing and customer service costs (6) General and administrative costs (7) Three Months December 31, 2019 $48 Note: Revenue and expense items are year
Slide 10: Full-Year 2019 Financial Summary
Full-Year 2019 Financial Summary $ millions Revenue Net Income Adjusted EBITDA(1) +8% +23% +27% $1,365 $153 $303 $1,258 $125 $238 2018 2019 2018 2019 2018 2019 1 See the Appendix accompanying this presentation for a reconciliation of Adjusted EBITDA, a non-GAAP measure, to the nearest GAAP measure.
Slide 11: FY 2019 Adjusted EBITDA Bridge
FY 2019 Adjusted EBITDA(1) Bridge $ millions Year Ended December 31, 2018 $238 Impact of change in revenue(2) 74 Contract claims costs 37 Sales, marketing and customer service costs (19) Spin-off dis-synergies (4) General and administrative costs (25) Year Ended December 31, 2019 $303 Note: Revenue
Slide 12: FY 2019 Cash Flow
FY 2019 Cash Flow $ millions Net cash provided from 2019 2018 (used for): $ millions, except Free Cash Flow Conversion Free Cash Cash and Operating Activities $200 $189 Free Cash Flow Marketable Flow(1) Conversion(1) Securities Investing Activities (61) (10) Financing Activities (7) (165) $178 59% $
Slide 13: Capital Structure
Capital Structure 1, 2 Net Debt Net debt/EBITDA • Successfully executing strategy to improve capital 947 structure 882 846 • Net debt leverage ratio 3.9x 773 763 improved to 2.4x by end of 3.7x 3.4x 726 2019 2.7x 2.5x 2.4x • Reduced net debt by 23% and leverage ratio ~40% since the Spin-Off Q3 2018
Slide 14: Full-Year 2020 Outlook
Full-Year 2020 Outlook 2020 Outlook 2019 Results Low High Revenue ($ billions) 1.36 1.47 1.49 Gross Profit Margin (%) 50 49 50 Adjusted EBITDA ($ millions) 303 300 320 Capital Expenditures ($ millions)(1) 22 30 40 Annual Effective Tax Rate (%) 25 ~25 (1) A reconciliation of the forward-looking full-
Slide 15: Q&A
Q&A For more information please visit our website: frontdoorhome.com
Slide 16: Appendix
=p Frontdoor. APPENDIX
Slide 17: Q4 2019 Consolidated Results
Q4 2019 $ millions, except per share amounts Three Months Ended December 31, Consolidated 2019 2018 Better / (Worse) Revenue $ 300 $ 279 $ 21 YoY Growth 7% Results Gross Profit % of revenue 139 46.3% 125 44.6% 14 1.7 pts Selling and administrative expenses 95 80 (15) % of revenue 31.7% 28.6% (3.2) p
Slide 18: FY 2019 Consolidated and Combined Results
FY 2019 $ millions, except per share amounts Year Ended December 31, Consolidated 2019 2018 Better / (Worse) Revenue $ 1,365 $ 1,258 $ 107 YoY Growth 8% and Combined Gross Profit % of revenue 678 49.6% 572 45.5% 105 4.2 pts Results Selling and administrative expenses 392 338 (54) % of revenue 28.7%
Slide 19: Net Income to Adjusted EBITDA Reconciliations
Net Income to Adjusted EBITDA Reconciliations $ millions Three Months Ended Year Ended December 31, December 31, 2019 2018 2019 2018 Net Income $ 19 $ 17 $ 153 $ 125 Depreciation and amortization expense 6 6 24 21 Restructuring charges 1 — 1 3 Spin-off charges — 1 1 24 Provision for income taxes 5 6
Slide 20: Net Income to Adjusted Net Income Reconciliations
Net Income to Adjusted Net Income Reconciliations $ millions, except per share amounts Three Months Ended Year Ended December 31, December 31, 2019 2018 2019 2018 Net Income $ 19 $ 17 $ 153 $ 125 Amortization expense 1 2 6 8 Restructuring charges 1 — 1 3 Spin-off charges — 1 1 24 Affiliate royalty e
Slide 21: Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations
Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations $ millions, except Free Cash Flow Conversion Three Months Ended Year Ended December 31, December 31, 2019 2018 2019 2018 Net Cash Provided from Operating Activities $ 47 $ 63 $ 200 $ 189 Property Additions (7) (5) (22) (27
Slide 22: Net Debt and Adjusted EBITDA Ratio Reconciliations
Net Debt and Adjusted EBITDA Ratio Reconciliations $ millions, except Net Debt / Adjusted EBITDA Ratio 2018 2019 Q3 Q4 Q1 Q2 Q3 Q4 Gross Debt $ 1,000 $ 998 $ 997 $ 995 $ 994 $ 993 Unrestricted Cash 53 117 150 222 230 267 Net Debt $ 947 $ 882 $ 846 $ 773 $ 763 $ 726 Trailing 12-Months Adjusted EBITDA