Frontdoor, Inc. · NASDAQ:FTDR
Frontdoor — Q3 2019 Earnings Presentation
16 slides from Frontdoor's earnings presentation, Nov 5, 2019
Slide 1: Third-Quarter 2019 Earnings Webcast
Third-Quarter 2019 Earnings Webcast November 5, 2019 1
Slide 2: 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 3: Agenda
Rex Tibbens Brian Turcotte Matt Davis President & Chief Senior Vice President & VP, Investor Relations Executive Officer Chief Financial Officer and Treasurer Agenda • Q3 2019 Summary • Q3 2019 Financials • Business Update • FY 2019 Outlook • 2019 Strategic Objectives 3
Slide 4: Q3 2019 Summary
Q3 2019 Summary Revenue increased 8% to $407 million Gross Profit Margin increased 415 bps to 51% Adjusted EBITDA increased 23% to $106 million Home Service Plan total increased 3% Focused on increasing customer retention Improving velocity of change across organization Celebrated Frontdoor’s one-ye
Slide 5: Business Update
Business Update • Accelerating marketing investment in the Direct-to- Consumer channel Direct-to-Consumer • Continuously improving processes to drive growth • Ramping up new real estate brokerage relationships to maximize customer growth Real Estate • Improving field sales force effectiveness throug
Slide 6: 2019 Strategic Objectives
2019 Strategic Objectives Customer Experience Enhancing the Customer Experience Optimizing Pricing / Pricing Launching Dynamic Pricing Business Processes/ Managing to the Inputs Cost Containment of the Business Building a Fast-Moving Culture / People Enabling Frontline Employees Technology Advancing
Slide 7: Financial Summary
Financial Summary Three Months Ended September 30, $ millions, except per share amounts 2019 2018 Change Revenue 407 377 8 % Gross Profit 206 176 17 % Net Income 61 49 23 % Diluted Earnings per Share 0.72 0.58 24 % Adjusted Net Income (1) 62 57 9 % Adjusted Diluted Earnings per Share (1) 0.73 0.67 9
Slide 8: Adjusted EBITDA Bridge
Adjusted EBITDA Bridge $ millions 11 21 1 $106 (6) $86 (7) Q3 '18 Revenue Contract Claims Sales, Marketing, General and Other Q3 '19 (1) Conversion Customer Service Administrative Note: Revenue and expense items are year-over-year increases/(decreases); amounts presented in table may not sum due to
Slide 9: Cash Flow and Cash Position
Cash Flow and Cash Position Nine Months Ended September 30, $ millions 2019 2018 Net cash provided from (used for): Operating Activities $ 154 $ 126 Investing Activities (19) (4) Financing Activities (6) (98) Cash increase during the period $ 129 $ 23 Note: Amounts presented in table may not sum due
Slide 10: Updated Full-Year 2019 Outlook
Updated Full-Year 2019 Outlook 2019 Outlook Low High Revenue (billions) $ 1.36 $ 1.37 Gross Profit Margin 49% 50% Adjusted EBITDA (millions)(1) $ 295 $ 300 Capital Expenditures (millions) $ 25 $ 30 Annual Effective Tax Rate ~25% (1) A reconciliation of the forward-looking full-year 2019 Adjusted EBI
Slide 11: Q&A
Q&A For more information please visit our website: www.frontdoorhome.com 11
Slide 12: Appendix
Appendix 12
Slide 13: Consolidated and Combined Results
Consolidated and Combined Results $ millions, except per share amounts Three Months Ended September 30, 2019 2018 Better / (Worse) Revenue $ 407 $ 377 $ 29 YoY Growth 8% Gross Profit 206 176 31 % of revenue 50.7% 46.5% 4.2 pts Selling and administrative expenses 104 90 (14) % of revenue 25.6% 23.8%
Slide 14: Consolidated and Combined Results
Consolidated and Combined Results $ millions, except per share amounts Nine Months Ended September 30, 2019 2018 Better / (Worse) Revenue $ 1,065 $ 979 $ 86 YoY Growth 9% Gross Profit 539 448 91 % of revenue 50.6% 45.7% 4.9 pts Selling and administrative expenses 297 259 (39) % of revenue 27.9% 26.4
Slide 15: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation $ millions Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Net Income $ 61 $ 49 $ 134 $ 108 Depreciation and amortization expense 6 5 18 14 Restructuring charges — — — 3 Spin-off charges — 8 1 23 Provision for income t
Slide 16: Net Income to Adjusted Net Income Reconciliations
Net Income to Adjusted Net Income Reconciliations $ millions, except per share amounts Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Net Income $ 61 $ 49 $ 134 $ 108 Amortization expense 1 2 5 6 Restructuring charges — — — 3 Spin-off charges — 8 1 23 Affiliate