Boyd Group Services Inc · TSX:BYD
Boyd Group Services — Q3 2023 Earnings Presentation
32 slides from Boyd Group Services's earnings presentation, November 2023
Slide 1: Boyd Group Services Inc. Investor Presentation
BOYD GROUP SERVICES INC. Investor Presentation November 2023 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 November 10, 2023) Stock Symbol: TSX: BYD.TO Shares Outstanding: 21.5 million Price (November 10, 2023): C$243.90 52-Week Low / High: C$197.66/$256.90 Market Capitalization: C$5,237.1 million Annualized Dividend (per share): C$0.600 Current Yield: 0.25% 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$41.0 billion market • Third largest retail auto glass operator in the U.S. • Only public company solely focused on au
Slide 5: Collision Operations
Collision Operations • 907 company operated collision locations across 32 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, incl
Slide 6: North American Collision Repair Footprint
North American Collision Repair Footprint Canada • • Ontario (81) Alberta (16) 127 locations • British Columbia (14) • Manitoba (12) • Saskatchewan (4) Note: The above numbers include 33 intake locations. U.S. • • Florida (76) Michigan (75) • • South Carolina (20) Maryland (13) locations 780 • Illin
Slide 7: Glass Operations
Glass Operations • Retail glass operations across 36 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 • Missouri • Arizona • Nevada • Arkansas • New Hampshire • California • New York • Colorado • North Carolina • Connecticut • Ohio • District of Columbia • Oklahoma • Florida • Oregon • Georgia • Pennsylvania • Idaho • Rhode Island • Illinois • Tennessee
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$41.0 billion annually (U.S. $38.6B, CDA $2.4B) • 31,000 shops in the U.S., 4,150 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 18.4% share of collision repair revenue in 2021 as compared to 18.2% in 2020 and only 1.7% in 2006 ▪ 100 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 23.4% Other 35-40% DRP Top 10 Insurers 60-65% 76.6% Source: National Association of Insurance Commissioners Source: The Romans Group, 2021 13
Slide 14: Impact of Collision Avoidance Systems
Impact of Collision Avoidance Systems • CCC estimates technology will * reduce accident frequency per mile driven by ~30% in next 25-30 years (based on 2010 baseline) • As per industry studies, decline should be somewhat offset by increases in average cost of repair (increased expense of technology)
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
Expense Management Operating expenses as a % of sales 35.0% 33.1% 33.5% 32.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2020* 2021* 2022 *Operating expenses benefited from the Canada Emergency Wage Subsidy in the amount of approximately $5.8 million in 2021 and $7.4 million in 2020, which helped mitig
Slide 18: Same-Store Sales Growth
SSSG - Optimizing Returns from Existing Operations Same-store sales increases in 34 of 40 most recent quarters 10-year average SSSG: 5.9% 3-year average 2023 YTD SSSG: 18.3% 5-year average SSSG: 6.7% SSSG: 13.5% 35% Same-Store Sales Growth* 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% -35%
Slide 19: Focus on Accretive Growth
Focus on Accretive Growth • Goal: double the size of the business during the five-year period from 2021 to 2025, based on 2019 revenues, on a constant currency basis • Implied compound average annual growth rate of 15%: • Same-store sales • Acquisition or development of single locations • Increased
Slide 20: Strong Growth in Collision Locations
Strong Growth in Collision Locations 130 920 907 820 110 720 90 620 520 70 127 420 105 108 50 320 81 78 30 64 220 58 54 42 40 120 29 10 20 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 -10 -80 Annual additions Total locations *Results for 2020 were severely impacted by the COVID-19 Pandemic
Slide 21: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (“ESG”) • Second annual Environment, Social and Governance report published in August 2023 • Shows excellent strides in advancing ESG goals and ambitions 21
Slide 22: Financial Review
Financial Review THE pp Boyd GROUP
Slide 23: Revenue Growth
Revenue Growth (US$ millions) $3,000 $2,500 $2,432.3 $2,000 $1,872.7 $1,720.8 $1,561.2 $1,500 $1,438.3 $1,000 $500 $0 2018 2019 2020 2021 2022 *Results for 2020 were severely impacted by the COVID-19 Pandemic 23
Slide 24: Adjusted EBITDA
Adjusted EBITDA (US$ millions) Annualized Growth of 11.50% $300.0 $273.5 $250.0 $220.0 $219.5 $200.0 $150.0 $100.0 $50.0 $- 2020 2021 2022 *Results for 2020 were severely impacted by the COVID-19 Pandemic, and results for 2021 were impacted by a tight labor market, supply chain disruption and the CO
Slide 25: Q3 2023 Financial Summary
Q3 2023 Financial Summary 3-months ended 9-months ended (US$ millions, except per share and percent amounts) Sept 30, Sept 30, Sept 30, Sept 30, 2023 2022 2023 2022 Sales $737.8 $625.7 $2,206.0 $1,795.2 Gross Profit $333.8 $282.3 $1,003.6 $805.2 Adjusted EBITDA* $94.0 $73.0 $274.0 $198.8 Adjusted EB
Slide 26: Liquidity and Capital Resources
Liquidity and Capital Resources (in US$ millions) Sept 30, 2023 Dec 31, 2022 Cash $22.1 $15.1 Long-Term Debt $378.8 $360.2 Net Debt before lease liabilities (total debt, including current portion and bank $356.8 $345.1 indebtedness, net of cash) Lease liabilities $692.1 $617.9 Total debt, net of cas
Slide 27: Financial Flexibility
Financial Flexibility • Net Debt to EBITDA TTM ratio of 1.6x • Over US$600 million in cash and available credit, subject to EBITDA performance • Only public company in the industry: access to all capital markets *Adjusted EBITDA is a non-GAAP financial measure and is not a standardized financial mea
Slide 28: Dividends
Dividends Annualized dividends have increased by 8.7% since 2019 Annualized Dividend per Share (C$) $0.65 0.600 $0.60 0.588 0.576 0.564 0.552 $0.55 $0.50 $0.45 $0.40 $0.35 Nov 19 - Oct 20 Nov 20 - Oct 21 Nov 21 - Oct 22 Nov 22 - Oct 23 Nov 23 - Present 28
Slide 29: Five-year Return to Shareholders
Five-year Return to Shareholders Boyd Group S&P/TSX Composite 200% 5-year total return: 150% 106.83%* 100% S&P/TSX Composite 50% 19.59%* 0% -50% 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31/Dec/22 *Source: Irwin. Total return based on reinvestment of dividends. 29
Slide 30: Consistent Top Ten TSX Performer
Consistent Top Ten TSX Performer TSX Performance S&P/TSX Composite Years Ranking Boyd Returns Index Returns 2005-2015 #1 +4,655.0% +30.0% 2006-2016 #1 +9,966.5% +58.6% 2007-2017 #2 +5,795.6% +57.5% 2008-2018 #2 +5,901.2% +118.0% 2009-2019 #2 +4,236.0% +163.2% 2010-2020 #2 +3,786.0% +105.8% 2011-2021
Slide 31: Experienced & Committed Management Team
Experienced & Committed Management Team Timothy O’Day Jeff Murray Brian Kaner President & CEO Executive Vice President & CFO Executive Vice President & COO Collision 31
Slide 32: Summary
Summary ✓ Strong balance sheet Stability ✓ Insurer preference for MSOs ✓ Recession Resilient + ✓ US$41.0 billion fragmented industry ✓ High ROIC growth strategy Growth ✓ Market leader/consolidator in North America = ✓ Cash dividends/conservative payout ratio Shareholder Value ✓ 5-year total sharehol