Uni-Select — Q3 2020 Earnings Presentation
30 slides from Uni-Select's earnings presentation, Nov 13, 2020
Slide 1: Q3 2020 Conference Call
Q3 2020 (Ended September 30, 2020) Conference Call November 13, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements made in this presentation are forward-looking statements. These statements include, without limitation, statements relating to the effects and duration of the COVID-19 pandemic, general economic and business conditions, particularly in the context of the
Slide 3: Market Dynamics
UNI-SELECT, MARKET DYNAMICS
Slide 4: Industry Statistics – UNS Sales Correlated to the Market
Industry Statistics – UNS Sales Correlated to the Market Uni-Select sales are highly correlated to the industry United States Canada United Kingdom % Decrease in CCC’s Claim Count % change in KM driven relative to Transport Use (GB) (month over month) 2019 During COVID-19 140% -1.5% 120% -5.3% 100%
Slide 5: Foreign Exchange – Positive Impact on Sales
Foreign Exchange – Positive Impact on Sales The value of the U.S. dollar appreciated in the quarter compared to the Canadian dollar but depreciated versus the British Pound which resulted in higher overall sales for Uni-Select USD/CAD USD/GBP $1.50 Q3-20 £0.90 Q3-20 $1.45 £0.85 $1.40 £0.80 $1.35 £0.
Slide 6: Q3 2020 Highlights
UNI-SELECT, Q3 2020 HIGHLIGHTS
Slide 7: Typical Impact of Seasonality on UNS Results
Typical Impact of Seasonality on UNS Results While the impact of COVID-19 has temporarily distorted the typical seasonality of UNS’s results, Q4-20 is still expected to be soft Q1 Q2 Q3 Q4 FinishMaster SOFT STRONG STRONG SOFT CAG SOFT STRONG STRONG SOFT TPA STRONG STRONG SOFT SOFT * This seasonality
Slide 8: Strong Results in Challenging Environment
Strong Results in Challenging Environment • Sales var. (12.3%): (-) Slower recovery in FM Sales (M$) EBITDA(1) & Adj. EBITDA(1) (M$) (-) Integration of stores $51 (+) Acquisitions & FX $451 $395 • Organic growth(1) improved $38 sequentially from (31.9%) $33 $31 in Q2-20 vs Q2-19 8.4% 8.4% • Adj. EBI
Slide 9: CIP – Savings Achieved Ahead of Schedule
CIP – Savings Achieved Ahead of Schedule The reported 2020 CIP is essentially achieved for TPA and CAG but ongoing for FM Expected Realized(4) By the end Q2-20 Q3-20 YTD Q3-20 of 2020 Annualized cost savings $28.0 $14.0 $16.0 $30.0 (M$) Restructuring charges(1) $10.5 $10.4 - $10.4 Write-down of asse
Slide 10: FM – In Line With Slower Market Recovery
FM – In Line With Slower Market Recovery Sales (M$) EBITDA(1) & Adj. EBITDA(1) (M$) • Sales down (24.2%) due to the impact from the $216 $21.4 market mainly due to $198 $202 COVID-19 $16.4 $163 $133 $12.1 • Organic growth(1) 9.9% $7.9 improved sequentially $4.5 from (36.6%) in Q2-20 vs 4.9% Q2-19 Q3
Slide 11: CAG – Sustained Improvements in Results
CAG – Sustained Improvements in Results • Sales returned to 2019 run rate despite COVID-19: Sales (M$) EBITDA(1) & Adj. EBITDA(1) (M$) (+) Acquisitions $137 $137 (+) Organic growth $122 (-) FX $109 $114 (-) PBE market $19.1 $12.6 $12.9 • Organic growth(1) $9.2 13.9% improved sequentially 9.2% from (
Slide 12: TPA – Strong Recovery in Q3
TPA – Strong Recovery in Q3 Sales (M$) EBITDA(1) & Adj. EBITDA(1) (M$) • Sales var. ($3.2%): $98 (-) Impact from COVID-19 $95 $92 $97 (-) Integration of stores (+) FX $8.7 $55 $6.5 • Organic growth(1) improved $5.2 sequentially from (41.7%) $4.7 9.2% 6.7% in Q2-20 vs Q2-19 $0.3 • Adj. EBITDA(1) var.
Slide 13: Positive Consolidated Profit $8.8M
Positive Consolidated Profit • Adj. earnings(1) var. Net Earnings (loss) (M$) Adj. Earnings(1) (loss) (M$) (29.8%): • Lower adj. EBT $25 $11 • Different income tax rate $8 $5 $0.58 $4 $0.25 • Adj. earnings(1) up $0.18 sequentially over Q2-20 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q3-19 Q4-19 Q1-20 Q2-20 Q3-2
Slide 14: Q3 2020 Liquidity & Capital Resources
Q3 2020 LIQUIDITY & CAPITAL RESOURCES 14
Slide 15: Generating Strong Cash Flow
Generating Strong Cash Flow CFO(1) (M$) Free Cash Flow(2) (M$) • CFO var. +60M: $62 (+) working capital $33 $30 (+) timing of vendor financing $24 $35 • CFO improved on a $12 $13 sequential basis $2 $4 • FCF(2) up $3M Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 -$11 Changes in WC Cap
Slide 16: Managing Capital Investments
Managing Capital Investments As part of our cash conservation plan, we kept our capital deployment to a minimum. In Q3-20 we invested modestly in Capex and merchant advances. $100 $12 $33 Dividends have been $45 suspended $21 $12 $10 $20 $33 $6 $22 $3 $6 2018 2019 YTD 2020 Acquisitions Net capex & i
Slide 17: Reduced Debt Significantly
Reduced Debt Significantly Total Net Debt(1) Total Net Debt to Adj. EBITDA(1) • Reduced total net debt by: 530 • $47M vs Q2-20 4.56x 468 4.09x 3.96x 4.27x • $52M vs Q4-19 104 449 444 3.46x 0.96x 0.80x 0.81x 1.05x 96 397 0.78x • Reduced total net debt 101 94 3.60x 3.22x primarily due to: 97 426 3.29x
Slide 18: Maintaining Sufficient Liquidity
Maintaining Sufficient Liquidity Available Liquidity (M$) • Total available liquidity including cash net of letter of credits, is $254M as at Q3-20 $222 $235 $189 $201 $254 • Improved available liquidity from Q2-20 $439 • As at Q3-20 UNS is in $376 $392 $383 $313 compliance with all its covenants Q3
Slide 19: Complying With Covenants
Complying With Covenants As at September 30, 2020, Uni-Select is in compliance with all its covenants Selected Credit Agreement Covenants(1) Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Liquidity ˃$35M ˃$35M ˃$35M ˃$35M ˃$35M ˃$35M ˃$35M EBITDA ˃$0M ˃$0M ˃$0M ˃$20M ˃$25M Total D
Slide 20: Q4 2020 Outlook
UNI-SELECT, Q4 2020 OUTLOOK 20
Slide 21: Outlook
Outlook There is significant uncertainty in the market related to COVID-19, therefore the following Outlook is based on certain assumptions and visibility as of today. Consolidated Sales Business Segments • October 2020 sales show seasonal and Covid • FM sales: Market Sales recovery is expected on a
Slide 22: Appendix
UNI-SELECT, APPENDIX 22
Slide 23: Non-IFRS Financial Measures
Non-IFRS Financial Measures The information included in this presentation contains certain financial measures that are inconsistent with IFRS. Non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented
Slide 24: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Adjusted earnings and adjusted earnings per share represent net earnings excluding certain adjustments, net of income taxes, which may affect the comparability of the Corporation’s financial results. Management considers that these measures facilitate the analysi
Slide 25: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) This measure consists of long‐term debt, including the portion due within a year (as shown in note 12 to the Total net debt interim consolidated financial statements), net of cash. Total net debt to This ratio corresponds to total net debt divided by adjusted EBI
Slide 26: Reconciliation of Consolidated Organic Growth
Non-IFRS Financial Measures (cont’d) Reconciliation of Consolidated Organic Growth Third quarters YTD 2020 2019 2020 2019 FinishMaster US 163.5 215.7 499.1 632.5 Canadian Automotive Group 137.2 137.2 360.5 393.8 The Parts Alliance UK 94.6 97.8 246.0 300.7 Sales 395.4 450.8 1,105.6 1,327.0 (in %) (in
Slide 27: Reconciliation of EBITDA
Non-IFRS Financial Measures (cont’d) Reconciliation of EBITDA Third quarters YTD 2020 2019 % 2020 2019 % Net earnings (loss) 4.5 24.6 (26.5) 29.6 Income tax expense (recovery) 2.3 2.3 (6.3) 4.5 Depreciation and amortization 15.2 16.5 47.7 48.1 Finance costs, net 8.8 7.9 28.3 22.2 EBITDA 30.8 51.4 (4
Slide 28: Reconciliation of Adjusted Earnings and Adjusted EPS
Non-IFRS Financial Measures (cont’d) Reconciliation of Adjusted Earnings and Adjusted EPS Third quarters YTD 2020 2019 % 2020 2019 % Net earnings (loss) 4.5 24.6 (81.9) (26.5) 29.6 (189.4) Special items, net of taxes 1.9 (14.8) 16.6 (6.4) Amortization of intangible assets related to the 1.2 0.9 3.5
Slide 29: Reconciliation of Free Cash Flows
Non-IFRS Financial Measures (cont’d) Reconciliation of Free Cash Flows Third quarters YTD 2020 2019 2020 2019 Cash flows from operating activities 62.1 2.1 86.2 29.8 Changes in working capital (28.0) 32.4 (24.7) 67.9 Acquisitions of property and equipment (0.6) (4.6) (6.4) (16.3) Difference between
Slide 30: Uni-Select
UNI-SELECT. UNISELECT.COM