Uni-Select — Q1 2019 Earnings Presentation
34 slides from Uni-Select's earnings presentation, May 2, 2019
Slide 1: Q1 2019 Conference Call
Q1 2019 (Ended March 31, 2019) Conference Call May 2, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements made in this presentation are forward-looking statements. These forward-looking statements include, but are not limited to, statements relating to Uni-Select’s financial guidance (including, without limitation, adjusted EBITDA, adjusted EBITDA margin, ad
Slide 3: Introductory Remarks
UNI-SELECT. THE POWER OF TEAMWORK Introductory Remarks
Slide 4: Q1 2019 Results Overview
Q1 2019 Results Overview • Q1-19 sales of $420.0 million included a FX conversion impact of $12.6 million or 3.0% compare to Q1-18. • Consolidated organic sales growth(1) was $10.5 million or 2.5%, with a positive organic growth(1) in CAG at 4.9% and FM at 3.1%, while TPA reported a negative organic
Slide 5: Performance Improvement Plan ("PIP") - Update
Performance Improvement Plan (“PIP”) - Update • In January 2019, the Board and Management initiated the development of a broad performance improvement and rightsizing plan for FM U.S. • This plan is expected to generate additional annualized savings of $10.0 million by the end of 2019, focuses on 4
Slide 6: Performance Improvement Plan ("PIP") – Update
Performance Improvement Plan (“PIP”) – Update • The FinishMaster Rightsizing Plan is expected to generate $10M in annualized savings, segmented in the following: • $5.0 million from the consolidation of company-owned stores • $4.5 million from optimization • $0.5 million from spending reductions • T
Slide 7: Strategic Alternatives Review – Update
Strategic Alternatives Review – Update • In September 2018, the Board announced the formation of a Special Committee of independent members of the Board to oversee a review of strategic alternatives. As was indicated at the outset of this process, we have not determined a definitive schedule. Howeve
Slide 8: Q1 2019 Highlights
UNI-SELECT. THE POWER OF TEAMWORK * Q1 2019 Highlights
Slide 9: Typical Impact of Seasonality on UNS Results
Typical Impact of Seasonality on UNS Results Q1 Q2 Q3 Q4 FinishMaster SOFT STRONG STRONG SOFT CAG SOFT STRONG STRONG SOFT TPA STRONG STRONG SOFT SOFT TPA had a soft Q1-19 9
Slide 10: Consolidated Results – Q1 2019 Highlights
Consolidated Results – Q1 2019 Highlights Financial Results HIGHLIGHTS Q1-18 Q1-19 VAR Sales decreased 50 bps, driven primarily by Sales 422.1 420.0 (0.5%) FX, which was, in large part, compensated Organic growth(1) by organic growth(1) 2.5% EBT 12.1 (1.3) (110.7%) Organic growth(1) at 2.5%, mai
Slide 11: Consolidated EBITDA and Adjusted EBITDA
Consolidated EBITDA(1) and Adjusted EBITDA(1) Q1-19 Q1-18 VAR EBITDA as reported(1) 21.4 27.0 (20.9%) % sales 5.1% 6.4% 130 bps Special items 7.1 0.6 Adjusted EBITDA(1) 28.5 27.6 3.0% % sales 6.8% 6.5% 30 bps IFRS 16 impact (6.9) - Proforma adjusted EBITDA(1) 21.6 27.6 (22.1%) % sales 5.1% 6.5% (140
Slide 12: FinishMaster U.S. – Q1 2019 Highlights
FinishMaster U.S. – Q1 2019 Highlights Financial Results Q1-18 Q1-19 VAR HIGHLIGHTS Sales 201.4 204.5 1.6% Sales increased 1.6%, driven by organic Organic growth(1) 3.1% growth(1), partially offset by # of billing days EBT 15.4 3.7 (76.2%) Q1-19 organic growth(1) at 3.1%, EBT%(1) 7.7% 1.8% (590
Slide 13: Canadian Automotive Group – Q1 2019 Highlights
Canadian Automotive Group – Q1 2019 Highlights HIGHLIGHTS Financial Results Q1-18 Q1-19 VAR Sales increased 2.2%, primarily explained by organic growth(1) and the contribution of Sales 110.7 113.1 2.2% acquisitions for $2.7M, exceeding the effect Organic growth(1) 4.9% of FX EBT 0.2 2.7 > 100% Q
Slide 14: The Parts Alliance U.K. – Q1 2019 Highlights
The Parts Alliance U.K. – Q1 2019 Highlights Financial Results HIGHLIGHTS Q1-18 Q1-19 VAR Sales 110.0 102.4 (6.9%) Sales decreased 6.9% due to FX and negative Organic growth(1) (1.0%) organic growth(1), more than offsetting the contribution of acquisitions EBT 7.3 2.3 (68.1%) EBT%(1) 6.6% 2.3% (43
Slide 15: Q1 2019 Financial Review
UNI-SELECT. THE POWER OF TEAMWORK " Q1 2019 Financial Review
Slide 16: Sales
Sales Q1 Total Sales by Business Segment TTM Total Sales by Business Segment 422.1 420.0 1,749.9 (0.5%) 1,573.2 +11.2%(2) 110.0 102.4 410.5 258.7 110.7 113.1 498.1 506.3 201.4 204.5 816.3 833.1 Q1-18 Q1-19 TTM Q1-18 TTM Q1-19 (1) FinishMaster U.S. Canadian Automotive Group The Parts Alliance U.K. Fi
Slide 17: EBT and Adjusted EBT
EBT and Adjusted EBT(1) Q1 EBT by Business Segment Q1 Adj. EBT(1) by Business Segment 14.2 12.1 7.3 7.3 7.1 0.2 0.2 (1.3) 2.3 3.5 15.4 2.3 15.4 2.7 9.0 2.9% 3.7 (0.3%) 3.4% 1.7% (10.8) (10.0) (8.7) (7.8) Q1-18 Q1-19 Q1-18 Q1-19 EBT margin Adj. EBT margin (1) FinishMaster U.S. Canadian Automotive Gro
Slide 18: Earnings and EPS
Earnings(1) and EPS(1) Earnings(1) EPS(1) 12.1 0.29 10.4 0.25 5.0 0.12 (0.03) (1.3) Q1 EPS Q1 Adj. EPS (1) Q1 Net Earnings Q1 Adj. Earnings (1) Q1-18 Q1-19 Q1-18 Q1-19 Q1-19 Adj. earnings(1) decreased by $7.1M mainly resulting from a lower adjusted EBT and a change in the proposed U.S. tax regulatio
Slide 19: Cash Flow & FCF
Cash Flow & FCF(1) Cash Flow from Operations Free Cash Flow(1) 91.6 92.4 Large payments 81.3 through the 55.4 vendor financing program Lower level of income tax Q1 instalments TTM 19.2 (30.3) 6.7 (69.5) Q1 TTM 2018 2019 2018 2019 Q1-19 cash flow from operations was mainly impacted by large payments
Slide 20: Financial Position
Financial Position Total Net Debt(1) Funded Debt to Adj. EBITDA(1) 627 4.47x Lease obligations are now included in debt 3.84x 3.60x 3.50x 469 450 Net debt increased 3.12x 419 due to the large 394 payments for the vendor financing payables Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 A
Slide 21: Guidance
UNI-SELECT. THE POWER OF TEAMWORK * GUIDANCE
Slide 22: 2019 Consolidated Guidance
2019 Consolidated Guidance Guidance adjusted to reflect the adoption of IFRS 16 Consolidated Guidance Consolidated organic sales growth(1) 1.25% - 3.25% Consolidated adj. EBITDA(1) margin 7.5% - 8.5% Consolidated adj. EBT(1) margin 2.5% - 3.5% Consolidated effective tax rate 23.0% - 25.0% Capex(2) $
Slide 23: Typical Impact of Seasonality on UNS Cashflow
Typical Impact of Seasonality on UNS Cashflow Cash flow from operating activities (in millions of dollars) Q1 Q2 Q3 Q4 2016 (8) 38 49 55 2017 2 28 49 45 2018 (30) 39 72 13 2019E 2019 will be negatively impacted by a one-time $55M (69) cash outflow due to changes in payment terms from one of our larg
Slide 24: Conclusion
Conclusion • We are taking action to bring Uni-Select back to strong and solid profitability • The key to our success will be the execution of our Performance Improvement Plan • FinishMaster and CAG: focus on executing the PIP • TPA: focus on managing through temporary headwinds 24
Slide 25: Appendix
UNI-SELECT. THE POWER OF TEAMWORK ' APPENDIX
Slide 26: 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 27: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Management uses adjusted EBT, adjusted earnings and adjusted earnings per share to assess EBT, net earnings and net earnings per share from operating activities, excluding certain adjustments, net of income taxes for adjusted earnings and adjusted earnings per sh
Slide 28: 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, net of cash. Starting Total net debt January 1, 2019, the total net debt includes new lease obligations arising from the adoption of IFRS 16 – Leases, for which the initial amount r
Slide 29: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Reconciliation of consolidated Organic growth First quarters 2019 2018 FinishMaster U.S. 204.5 201.4 Canadian Automotive Group 113.1 110.7 The Parts Alliance U.K. 102.4 110.1 Sales 420.0 422.1 % Sales variance (2.1) (0.5) Conversion effect of the Canadian dollar
Slide 30: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Reconciliation of EBITDA First quarters 2019 2018 % Net earnings (loss) (1.3) 10.4 Income tax expense - 1.7 Depreciation and amortization 15.9 9.9 Finance costs, net 6.8 5.0 EBITDA 21.4 27.0 (20.9) EBITDA margin 5.1% 6.4% 30
Slide 31: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Reconciliation of EBT and Adjusted EBT First quarters 2019 2018 % Net earnings (loss) (1.3) 10.4 Income tax expense - 1.7 EBT (1.3) 12.1 (110.7) EBT margin (0.3%) 2.9% Special items 7.1 0.6 Amortization of intangible assets related to the acquisition of The 1.3 1
Slide 32: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Reconciliation of Adjusted Earnings and Adjusted EPS First quarters 2019 2018 % Net earnings (loss) (1.3) 10.4 (112.8) Special items, net of taxes 5.3 0.6 Amortization of intangible assets related to the 1.1 1.2 acquisition of The Parts Alliance, net of taxes Adj
Slide 33: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Reconciliation of Free cash flows First quarters 2019 2018 Cash flows used in operating activities (69.5) (30.3) Changes in working capital 95.0 41.1 Acquisitions of property and equipment (6.1) (3.9) Difference between amounts paid for post-employment (0.2) (0.2
Slide 34: UNI-SELECT. UNISELECT.COM
UNI-SELECT. UNISELECT.COM 34