Uni-Select — Investor Presentation (February 2017)
37 slides from Uni-Select's investor presentation, Feb 24, 2017
Slide 1: Accelerating Profitable Growth
Accelerating Profitable Growth Uni-Select TSX: UNS February 2017
Slide 2: Forward-Looking Information
FORWARD-LOOKING INFORMATION The information provided in this presentation contains some forward-looking information, which includes certain risks and uncertainties, and may cause the final results to be significantly different from those listed or implied within this presentation. For additional inf
Slide 3: Welcome and Introduction
WELCOME AND INTRODUCTION Objectives • Provide insights on Uni-Select strategy and vision following the disposition of the US automotive parts distribution activities • Highlight Uni-Select’s position and way forward • Discuss our M&A and growth strategy p3
Slide 4: Our Executive Team
OUR EXECUTIVE TEAM Henry Buckley Gary O’Connor Steve Arndt President and President and President and Chief Executive Officer Chief Operating Officer Chief Operating Officer Automotive Canada FinishMaster Eric Bussières Annie Hotte Louis Juneau Chief Financial Officer Chief People Officer Chief Legal
Slide 5: Uni-Select Today
UNI-SELECT TODAY Uni-Select Corporate Office FinishMaster Automotive Canada US National Coverage Canadian National Coverage Automotive and industrial Automotive Aftermarket Parts paint & related products Automotive and industrial paint & related products 3,000+ Share a common goal: to provide our cu
Slide 6: Highlights
HIGHLIGHTS 2016 All figures are in US$ $107.6M (1) $1.2B (1) Adj. EBITDA or Revenues 9.0% of sales 1,100+ 250+ Independent Corporate Customer Stores Stores (1) Refer to the Appendix 1 at the end 14 of this presentation Distribution Centres p6
Slide 7: Our Business - The Strength of Our Network
OUR BUSINESS - THE STRENGTH OF OUR NETWORK A leader in its markets Over Over 10 50+ Automotive Canada 16,000 1,100 Canada’s leader in the distribution of Distribution Corporate Auto service shop Independent automotive parts, tools and equipment to centres stores and collision repair wholesaler the a
Slide 8: Our Strategy
OUR STRATEGY ACCELERATE PROFITABLE GROWTH • Balanced – Organic and Acquisitive Growth INTEGRATE ACQUISITIONS • Capture synergies BEST TEAM IN THE BUSINESS • Continue to attract, retain and develop the best team in the business FINISHMASTER: • Organic Growth • Extend geographic coverage & build densi
Slide 9: Products and Brands
PRODUCTS AND BRANDS FinishMaster USA North America’s leading independent automotive paint distributor Products: Automotive and industrial paint & related products BRAND Automotive Canada Canada’s leading automotive aftermarket supplier Products: Automotive aftermarket parts, Industrial products and
Slide 10: Our Distribution Center Network
OUR DISTRIBUTION CENTER NETWORK 10 distribution centres United States • Mira Loma (CA) Canada •Grand Rapids (MI) • Coquitlam (BC) •Adel (GA) • Calgary (AB) • Moorestown (NJ) • Edmonton (AB) • Saskatoon (SK) • Winnipeg (MB) • Brampton (ON) 4 • Halton Hills (ON) distribution • Boucherville (QC) centre
Slide 11: We Are the Distribution Link Between Manufacturers and the Marketplace
WE ARE THE DISTRIBUTION LINK BETWEEN MANUFACTURERS AND THE MARKETPLACE National & Private Brand Drop Ship Capability Installers Manufacturers Traditional collision repair centres Independent Multi-shop wholesalers organizations Our distribution centres National and regional Our corporate stores acco
Slide 12: FinishMaster - USA
FINISHMASTER – USA Automotive and industrial paint & related products Collision repair centres turning to FinishMaster for their needs FinishMaster is dedicated to meeting your shop’s needs: • Inventory management program • Customized, efficient procedures • Multiple ordering options • Scaled report
Slide 13: Automotive Canada
AUTOMOTIVE CANADA Automotive aftermarket parts, Industrial products and Paint & related products Comprehensive business solutions for Growing network of Supporting the growth of auto independent wholesalers corporate stores service centres 1,100+ Independent 16,000 Installer + 1,400+ Team Members 50
Slide 14: Automotive Refinish Leader in Canada
AUTOMOTIVE REFINISH LEADER IN CANADA Uni-Select sells automotive and industrial paint and related products across Canada through independent jobbers and corporate stores. Part of the largest network Uni-Select owns a program for Recently launched of collision repair centres collision repair faciliti
Slide 15: Products and Brands
PRODUCTS AND BRANDS More than 2 million automotive products available Almost 30,000 automotive and industrial paint & related products • Exceptional product breadth • Top “national” brand manufacturers • Select private brand offer • Optimizing the supply chain to deliver “high fill rates” p15
Slide 16: Products and Brands: Private Brand Offer
PRODUCTS AND BRANDS Complimentary private brand offer: • Uni-Select’s private-label product offering provides excellent quality at competitive price Automotive Canada FinishMaster High-quality Economical High-quality, Launched in 2014, High-quality friction products, products with competitively Mätk
Slide 17: Distribution Capability
DISTRIBUTION CAPABILITY Dedicated to efficient customer service: • Uni-Select’s culture prioritizes external and internal customer service • Continuous improvement mindset supported by formal programs • Powerful systems • Inventory visibility and management • Order accuracy • Integrated processes •
Slide 18: Recent Acquisitions
RECENT ACQUISITIONS Since January 2015, we have acquired 33 businesses in both Canada and the United States, which represents 114 new corporate stores. We are also pleased to welcome over 700 new team members within our Uni-Select family. FinishMaster USA Automotive Canada p18
Slide 19: M&A - Divestiture of Uni-Select USA & Beck/Arnley Worldparts
M&A – DIVESTITURE OF UNI-SELECT USA, INC. & BECK/ARNLEY WORLDPARTS, INC. • On June 1st, 2015, we completed the sale of substantially all of the assets of Uni-Select USA, Inc. and Beck/Arnley Worldparts, Inc. to affiliates of Icahn Enterprises L.P. originally announced on February 9, 2015 • $340 mill
Slide 20: M&A Process - Standard Playbook
M&A PROCESS – STANDARD PLAYBOOK Created and utilize a standard playbook for: • Business Development – including: • M&A Filter & Target Criteria • Pipeline Development and Contact Management • Target Assessment & Valuation: • Business Owned Transactions • Central Valuation Modeling – Aligned with Bus
Slide 21: M&A Process - Standard Playbook, Cont.
M&A PROCESS – STANDARD PLAYBOOK, Cont. Created and utilize a standard playbook for: • Day 1/Week 1 • Standard and optimized processes for day 1/week 1 communication • New team member focused • Synergy Capture • Standard processes for synergy tracking and capture p21
Slide 22: Q4 2016 - Total Sales by Business Segment
Q4 2016 – TOTAL SALES BY BUSINESS SEGMENT In millions of US dollars Q4 2016 HIGHLIGHTS (YoY) • Total Sales up 12.3% to $291.0 million 350 323.8 318.5 291.0 • Paint and Related Products segment 300 sales reached $180.8 million up 17.7% 259.2 264.0 due to acquisitions as well as net 250 customer recru
Slide 23: Q4 2016 - Adjusted EBITDA by Business Segment
Q4 2016 – ADJUSTED EBITDA BY BUSINESS SEGMENT (1) In millions of US dollars YTD & Q4 2016 HIGHLIGHTS (YoY) 30.8 35 29.7 • Q4 adjusted EBITDA (1) was up 26.6% due to higher contribution from the 7,6 25.4 (2) Paint and Related Products segment 30 21.7 8,9 20.0 (2) • Q4 adjusted EBITDA margin (1) 25 5,
Slide 24: Q4 2016 - Adjusted Earnings & Adjusted EPS
Q4 2016 – ADJUSTED EARNINGS (1) & ADJUSTED EPS (1) In millions of US dollars +18.3% (YoY) +19.2% (YoY) Adjusted earnings (1) Adjusted earnings per Share (1)(3) 18 17,3 0,41 16,8 0,40 0,40 16 14 13.1 (2) 0.31 (2) 11,5 0,30 12 11.0 (2) 0,27 0.26 (2) 10 0,20 8 6 4 0,10 2 0 0,00 Q4 2015 Q1 2016 Q2 2016
Slide 25: YTD 2016 - Operating Results Highlights
YTD 2016 – OPERATING RESULTS HIGHLIGHTS % Revenue % Revenue Q4 16 Q4 15 Q4 16 Q4 15 YR 16 YR 15 YR 16 YR 15 Sales 291.0 259.2 1,197.3 1,355.4 Sales from net assets sold - - - (299.3) Gross margin 92.6 77.5 31.8% 29.9% 366.6 402.6 30.6% 29.7% Employee benefits 45.0 42.3 15.5% 16.3% 175.6 213.7 14.7%
Slide 26: Q4 2016 - Sources and Uses of Funds
Q4 2016 – SOURCES AND USES OF FUNDS (vs. Q4 2015) In millions of US dollars 89 Operating activities Financing activities Business Other acquisitions investments Q4 2016 HIGHLIGHTS (YoY) 79 69 • Free cash flow increased by $1.5 million or 7.7% compared to last 59 -25.5 year +54.9 (82.5) 49 • Operatin
Slide 27: Leverage Profile as of December 31, 2016
LEVERAGE PROFILE as of December 31, 2016 3,5 3,25 3,24 STRONG FINANCIAL POSITION 3 2,81 2,74 2,5 2,34 • Strong free cash flow following the sale of US automotive parts 2 distribution business in 2015 1,5 1,04 • Over $280 million available from the 1 credit facilities 0,5 0,00 0 2010 2011 2012 2013 2
Slide 28: Q4 2016 - Summary
Q4 2016 – SUMMARY (1) • Solid revenue and adjusted EBITDA growth driven by accretive business acquisitions (1) • Adjusted EBITDA margin reached 9.0%, a 100 basis point improvement from last year’s comparable adjusted EBITDA • Cash flows of $54.9M generated by operating activities compared to 17.3M c
Slide 29: Market Data
MARKET DATA (Ss) UNI-SELECT,
Slide 30: U.S. Collision Repair Market (2014)
U.S. COLLISION REPAIR MARKET (2014) 13,800,000 Insurance claim accidents 10,900,000 2,900,000 repairable total loss $2,660 average/unit $8,760 average/unit $32.3 billion total repair revenue $3.3 billion paid by consumer + $29.0 billion $25.4 billion paid by insurance paid by insurance $54.4 billion
Slide 31: Sales of New Vehicles
SALES OF NEW VEHICLES In thousands 16,8 17,2 15,2 15,4 1,890 1,939 1,951 1,717 1,776 13,5 1,584 1,621 12,4 1,485 11,1 2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015 2016E USA CANADA Source: Ward's Automotive Group Source: AIA 2014 Outlook Study and DesRosiers Automotive Consul
Slide 32: Miles Traveled and Average Gasoline Price per Gallon
MILES TRAVELED AND AVERAGE GASOLINE PRICE PER GALLON 2010-2016 Annualized DistanceTraveled (billions of miles) 2010-2017 Average Gasoline Price (US$ per gallon) 3 250 4,5 3 200 4 3 150 3 100 3,5 $ / Gallon 3 050 Billion Miles |--Forecast--| 3 3 000 2 950 2,5 2 900 2 2 850 2 800 1,5 Q1 Q2 Q3 Q4 Q1 Q2
Slide 33: Length of Vehicle Ownership - United States
LENGTH OF VEHICLE OWNERSHIP – UNITED STATES p33
Slide 34: Average Age and Total Light Vehicles in NORAM
AVERAGE AGE AND TOTAL LIGHT VEHICULES IN NORAM Average Age of Vehicles in Canada and U.S. In years Sources: * Forecast • 2014 Outlook Study • www.polk.com (Average age calculated from IHS Automotive, driven by Polk's NVPP database as of January 2014 • DesRosiers Automotive Consultants, inc. Total Li
Slide 35: www.uniselect.com
www.uniselect.com (Ss) UNI-SELECT,
Slide 36: Appendix
APPENDIX (Ss) UNI-SELECT,
Slide 37: Appendix 1: Non-IFRS Financial Measures
APPENDIX 1: NON-IFRS FINANCIAL MEASURES (1) EBITDA • This measure represents net earnings excluding finance costs, depreciation and amortization, equity income and income taxes. This measure is a financial indicator of a corporation’s ability to service and incur debt. It should not be considered by