Uni-Select — Investor Presentation (June 2016)
34 slides from Uni-Select's investor presentation, June 2016
Slide 1: Accelerating Profitable Growth
Accelerating Profitable Growth Uni-Select TSX: UNS June, 2016
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 Sales (1) 60% Unites States 40% Uni-Select Canada 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 2,800+
Slide 6: Highlights
HIGHLIGHTS 2015 All figures are in US$ $96.6M (1) $1.1B (1) Adj. EBITDA or Pro Forma 7.1% of sales Revenues 1,150+ 229+ Independent Corporate Customer Stores Stores (1) Refer to the Appendix 1 at the end of this presentation 13 Distribution Centres p6
Slide 7: Transformational Events - 2015
TRANSFORMATIONAL EVENTS - 2015 • 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 at a purchase price of US$321 million. • Transaction
Slide 8: 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 1,155 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 af
Slide 9: 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 (4-6%) • Extend geographic coverage • Buil
Slide 10: Products and Brands
PRODUCTS AND BRANDS FinishMaster 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 Pain
Slide 11: Our Distribution Center Network
OUR DISTRIBUTION CENTER NETWORK Canada • Coquitlam (BC) • Calgary (AB) • Edmonton (AB) • Saskatoon (SK) 10 • Winnipeg (MB) distribution • Brampton (ON) • Halton Hills (ON) centres • Boucherville (QC) • Laval (QC) • Moncton (NB) United States 3+1 • Mira Loma (CA) •Grand Rapids (MI) distribution •Adel
Slide 12: 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 13: FinishMaster
FINISHMASTER 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 reporting sy
Slide 14: Automotive Canada
Automotive Canada Automotive aftermarket parts, Industrial products and Paint & related products Comprehensive business solutions for independent wholesalers in Canada Growing network of corporate stores Supporting the growth of auto service centres 1,155+ Independent 16,000 Installer + 1,300+ Team
Slide 15: 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 of collision repair centres Uni-Select owns a program for collision repair facilities in Quebec 158 b
Slide 16: 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” p16
Slide 17: 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 18: 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 19: Recent Acquisitions
RECENT ACQUISITIONS Since February 2015, we have acquired 25 businesses in both Canada and the United States, which represents 82 new corporate stores. We are also pleased to welcome over 700 new team members within our Uni-Select family. FinishMaster 46 Automotive Canada 36 p19
Slide 20: Quarterly Financial Highlights: Sales by Segments
QUARTERLY FINANCIAL HIGHLIGHTS In millions US$ Sales by Segments * 478.7 465.4 427.2 411.7 408.3 276.2 259.2 264.0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 Automotive products Paint and related products Note: Due to seasonality, Q1 & Q4 are typically slower quarters while Q2 & Q3 are our strongest * 2
Slide 21: Quarterly Financial Highlights
QUARTERLY FINANCIAL HIGHLIGHTS In millions US$, except per share amounts Adjusted EBITDA (1) Adjusted Earnings (1) 35.0 20.0% 31.3 31.4 31.1 25.0 200.0% 18.0% 30.0 27.9 180.0% 26.0 16.0% 20.0 20.0 160.0% 25.0 21.7 14.0% 16.5 15.8 15.8 140.0% 19.5 20.0 20.0 12.0% 15.0 13.3 120.0% 10.0% 11.5 9.4% 11.0
Slide 22: Fiscal Year Financial Highlights
FISCAL YEAR FINANCIAL HIGHLIGHTS Sales & Adjusted EBITDA Margin (1) In millions US$ 1,781 1,798 1,788 1,784 1,355 7.1% 5.9% 5.7% 6.2% 5.3% 2011 2012 2013 2014 2015 FX (1:1.01) (1:1.00) (1:1.03) (1:1.10) (1:1.28) 2015 sales Include five months of operations of Uni-Select USA, Inc. and Beck/Arnley Wor
Slide 23: Fiscal Year Financial Highlights
FISCAL YEAR FINANCIAL HIGHLIGHTS In millions US$, except per share amounts Adjusted EBITDA (1) Adjusted Earnings (1) EBITDA (1) Net Earnings In 2015, following the disposition of the USA automotive operations, the corporation took a non cash write-off of $123.1M, incurred $21.8M of transaction relat
Slide 24: Leverage Profile
LEVERAGE PROFILE • $400M revolving credit facility, June 2019 4.50 4.00 • $20M letter of credit facility, June 2017 3.54 3.31 3.50 3.01 • EBITDA growth and strong free cash flow 3.00 2.34 2.50 following the sale of US automotive parts 2.53 2.00 distribution business giving us the 1.50 1.00 0.80 flex
Slide 25: Why Invest in Uni-Select
WHY INVEST IN UNI-SELECT • Positive Market Fundamentals – Continued vehicle sales growth in North America – 5-year record in the average number of kilometers driven in North America – Near-lowest average retail gas prices per gallon/liter in North America over the last 5 years – Average age of vehic
Slide 26: Market Data
MARKET DATA (s) UNI-SELECT,.
Slide 27: 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 paid by insurance $25.4 billion paid by insurance $54.4 billion
Slide 28: Sales of New Vehicles
SALES OF NEW VEHICLES In thousands 1.849 1.898 16.8 17.2 1.675 1.743 15.2 15.4 1.557 1.585 1.460 13.5 12.4 11.1 2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015 USA CANADA Source: Ward's Automotive Group Source: AIA 2014 Outlook Study and DesRosiers Automotive Consultants, inc.
Slide 29: Miles Traveled and Average Gasoline Price per Gallon
MILES TRAVELED AND AVERAGE GASOLINE PRICE PER GALLON 2010-2015 Miles Traveled (Billion) 2010-2017 Average Gasoline ($ per gallon) 3,200 4.5 3,150 4 3,100 3.5 3,050 $ / Gallon Billion Miles 3,000 3 2,950 2.5 |----------Forecast----------| 2,900 2 2,850 2,800 1.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 30: Length of Vehicle Ownership - United States
LENGTH OF VEHICLE OWNERSHIP – UNITED STATES p30
Slide 31: 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 32: www.uniselect.com
www.uniselect.com (s) UNI-SELECT,.
Slide 33: Appendix
APPENDIX (s) UNI-SELECT,.
Slide 34: Appendix 1: Non-IFRS Financial Measures
APPENDIX 1: NON-IFRS FINANCIAL MEASURES 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 an