Upbound Group, Inc. · NASDAQ:UPBD
Upbound — Rent A Center Inc DE — Q3 2020 Earnings Presentation
17 slides from Upbound's earnings presentation, Oct 29, 2020
Slide 1: Rent-A-Center: Third Quarter 2020 Earnings Review
Rent-A-Center: Third Quarter 2020 Earnings Review
Slide 2: Important Notices
IMPORTANT NOTICES Forward-Looking Statements This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding our goals, plans and projections with respect to our operations, financial pos
Slide 3: Third Quarter 2020 Review
Preferred Lease Invoice Volume 40% Year-over-Year Growth THIRD QUARTER 2020 REVIEW 34.4% 30% Consolidated revenues of $712 million, up 9.6% versus the third quarter of 2019 20% 1 10% Third quarter Adjusted EBITDA of $92.1 million increased 63% over the third quarter 2019 and Non-GAAP Diluted EPS
Slide 4: Economic Trends: Favorable for LTO
ECONOMIC TRENDS: FAVORABLE FOR LTO Our model has proved resilient across economic cycles with current trends supportive for LTO growth 70% of banks tightened lending standards in Q3, according to the Federal Reserve Bank Subprime borrowers saw their limits cut 19.2% as banks reduced exposure d
Slide 5: Preferred Lease: Accelerating Growth
PREFERRED LEASE: ACCELERATING GROWTH Long-Term Growth 3Q 2020 Highlights Strategies Added new leadership with a Accelerate growth by long history of bringing positioning Preferred brand disruptive innovation to financial as leading FinTech platform services via technology $1.2B Use technology
Slide 6: Preferred Dynamix
PREFERRED DYNAMIX New operating structure to accelerate the pace of innovation and provide a more effective way to onboard new talent and digital expertise Foundational LTO Program Seamless LTO across Proprietary platform to6 mobile, web & store facilitate e-commerce
Slide 7: Rent-A-Center Business: Driving Sustainable, Profitable Growth
RENT-A-CENTER BUSINESS: DRIVING SUSTAINABLE, PROFITABLE GROWTH Rent-A-Center Business Long-Term Growth 3Q 2020 Highlights Product Assortment Strategies New leadership with proven Increase omni-channel sales track record across multiple while driving financial functions at Rent-A-Center 4% perfor
Slide 8: Evolving the LTO Model via Digital
EVOLVING the LTO MODEL VIA DIGITAL Progress in digital payments and prospects for higher engagement rates have long-term benefits for omni-channel Rent-A-Center Business Rent-A-Center Business E-Comm. Share of Total Revenues % of Revenue from Digital Payments 50% 41% 40% 35% 30% 30% 28% 25% 23% 20
Slide 9: Financial Highlights Q3 2020
FINANCIAL HIGHLIGHTS Q3 2020 Better or Worse In millions, except percentages and EPS Actual % of Total Revenue versus Q3 2019 Rent-A-Center Business1 $474 66.6% $38 8.6% Preferred Lease $202 28.3% $17 9.3% Franchising $24 3.4% $9 59.6% Mexico $12 1.7% ($1) (9.1%) Total Revenue $712 100.0% $63 9.6% %
Slide 10: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS Preferred Lease Revenue Growth: +9.3% YoY Invoice Volume: +34.4% YoY, driven by growth in new virtual retail partner additions and organic growth in existing locations Invoice Volume is expected to be up approximately 25 percent in 2020 Skip / Stolen Losses: 11.3% of
Slide 11: 2020 Guidance
2020 GUIDANCE: Annual Guidance 1 Low High Consolidated 2 Revenues ($B) $2.795 $2.825 Adjusted EBITDA ($M) 4 $308 $323 Diluted Non-GAAP EPS 4 $3.35 $3.50 Free Cash Flow ($M) 3,4 $200 $215 Preferred Lease Segment Revenues ($M) $812 $822 Adjusted EBITDA ($M) 4 $66 $71 Rent-A-Center Business Segment Rev
Slide 12: Capital Strategy
CAPITAL STRATEGY Investments 1 Working capital investment in 2020 to support growth in Liquidity demand across both segments (in millions) $437 $418 Implementing additional e-commerce functionality Investments focused on capturing whitespace opportunity in virtual and digital as lease-to-own s
Slide 13: Positioned for Growth: Question and Answer
Rent-A-Center: Positioned for Growth Third Quarter 2020 Earnings Review Question and Answer
Slide 14: Appendix
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Slide 15: Reconciliation of Net Earnings Per Share to Non-GAAP Diluted EPS
Reconciliation of Net Earnings Per Share to Non-GAAP Diluted Earnings Per Share Three Months Ended September 30, 2020 2019 (in thousands, except per share data) Amount Per Share Amount Per Share Net Earnings $ 64,030 $ 1.15 $ 31,277 $ 0.56 Special items, net of taxes Other charges (gains)1 (1,341) (
Slide 16: Reconciliation of Operating Profit to Adjusted EBITDA
Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment) Three Months Ended September 30, 2020 Rent-A- Preferred Center Mexico Franchising Corporate Consolidated Lease (in thousands) Business GAAP Operating Profit (Loss) $ 99,950 $ 16,073 $ 1,724 $ 3,146 $ (40,706) $ 80,18
Slide 17: Reconciliation of Net Cash Provided by Operations to Free Cash Flow
Reconciliation of Net Cash Provided by Operations to Free Cash Flow Three Months Ended Sptember 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Net cash provided by operating activities $ 41,507 $ 42,711 $ 296,226 $ 228,129 Purchase of property assets (7,807) (6,922) (22,557)