Monro, Inc. · NASDAQ:MNRO
Monro — Investor Presentation (May 2019)
28 slides from Monro's investor presentation, May 2019
Slide 1: Monro, Inc. Investor Presentation May 2019
Monro, Inc. Investor Presentation May 2019
Slide 2: Safe Harbor Statement and Non-GAAP Measures
Safe Harbor Statement and Non-GAAP Measures Certain statements in this presentation, other than statements of historical fact, including estimates, projections, statements related to our business plans and operating results are forward-looking statements within the meaning of the Private Securities
Slide 3: Company Overview
Company Overview A Leading Chain of Independently Owned and Operated Tire and Auto Service Locations ▪ Dominant in the Northeastern U.S. and expanding in Southern and Western markets ▪ Fiscal 2019 sales of $1,200.2 million ▪ 1,249 company operated stores in 30 states and 98 franchised locations as o
Slide 4: A Unique Operating Model
A Unique Operating Model Monro Has a Diversified Supply Chain, Sourcing High Quality, Low Cost Parts Direct and a Strong Portfolio of Tire Brands PARTS The following types of parts are sourced from various cities in China: ▪ Brake Rotors and Pads ▪ Filters ▪ Steering and Suspension ▪ Wipers ▪ Belts
Slide 5: A Favorable Industry Backdrop
A Favorable Industry Backdrop Favorable Industry Backdrop for Automotive Services with the Vehicles in Operation Expected to Grow Significantly Over the Next Few Years 20 U.S. Annual Light Vehicle Sales U.S. Light Vehicles in Operation (VIO) 300 18 290 16 280 14 270 12 260 10 250 8 240 6 230 4 220 2
Slide 6: A Favorable Industry Backdrop
A Favorable Industry Backdrop Monro is Well-Positioned to Capitalize on Positive Industry Trends, with Our Sweet Spot Experiencing the Fastest Growth in Vehicles in Operation Vehicles in Operation – 0 to 5 Years Vehicles in Operation – 6 to 12 Years 120 120 110 +6.56% CAGR -.03% CAGR 110 -3.97% CAGR
Slide 7: A Favorable Industry Backdrop
A Favorable Industry Backdrop Monro Operates in the $230 Billion Do-It-For-Me* Segment of $287 Billion U.S. Automotive Aftermarket Industry Automotive Aftermarket DIFM vs. DIY Sales 2008 % (outlets) 2016 % (outlets) CAGR 300,000 250,000 Dealers 20,770 15.6% 16,680 12.7% (2.7%) 200,000 General Repair
Slide 8: Fourth Quarter Fiscal 2019 Highlights
Fourth Quarter Fiscal 2019 Highlights Achieved Fifth Consecutive Quarter of Positive Comparable Store Sales Growth1 Quarterly Comps Trends 2-Year Stacked Quarterly Comps Trends 3.5% 4.0% 3.0% 2.0% 2.5% 2.0% 0.0% 1 1 1 1.5% 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1.0% -2.0% 0.5% 0.0% -4.0% 1 1 1 4QFY18 1Q
Slide 9: A Scalable Platform: Recent Acquisitions
A Scalable Platform: Recent Acquisitions Acquisitions Completed and Announced in Fiscal 2019 Represent $132M in Annualized Sales Completed Acquisitions ▪ Completed the acquisition of 40 retail locations and one distribution center in California in 1QFY20 ▪ Enters a new state, expanding the Company’s
Slide 10: Driving Long-Term Sustainable Growth
Driving Long-Term Sustainable Growth Improve Customer Experience Optimize Product & • Online reputation management Service Offering • Consistent in-store experience • Redefined selling approach • Consistent store appearance • Optimized tire assortment Scalable Platform to Enhance Customer-Centric Dr
Slide 11: Improve Customer Experience
Improve Customer Experience Online Reputation ❑ Improve SEO and local listing management Management ❑ Effectively build and manage online presence ❑ Deliver a best-in-class experience to all customers Consistent In-Store ❑ Provide clear product choices and quality service to Delivering a Five-Star E
Slide 12: Monro.Forward Progress Update
Monro.Forward Progress Update Monro.Forward Initiatives Well Underway and Advancing as Planned ❑ Continuing to execute customer satisfaction and online reputation management Improve Customer program across Monro’s store base Experience ❑ Focus on the in-store experience is having significant impact
Slide 13: Monro.Forward Progress Update
Monro.Forward Progress Update Monro.Forward Initiatives Well Underway and Advancing as Planned ❑ Rochester pilot refresh stores seeing increased customer satisfaction ratings Improve Customer ❑ Expanding store refresh to approximately 50 stores during 1QFY20 Experience ❑ Modernized store layout on t
Slide 14: Store Refresh: Brand Consolidation Strategy
Store Refresh: Brand Consolidation Strategy Consolidating Brand Portfolio Into Five Regional Power Brands to Increase Brand Awareness in Each Market Brand Consolidation Strategy ▪ Through acquisitions, Monro has grown to include nine well- Retail Brand Portfolio known retail brands underneath our co
Slide 15: Enhance Customer-Centric Engagement
Enhance Customer-Centric Engagement ❑ Focus marketing spend to higher ROI channels ❑ Focus on direct marketing via new analytic-based Customer Retention CRM platform ❑ Enhance private label credit card offering ❑ Use analytics to optimize digital efforts ❑ Leverage market segmentation and demographi
Slide 16: Monro.Forward Progress Update
Monro.Forward Progress Update Monro.Forward Initiatives Well Underway and Advancing as Planned ❑ Expanded collaboration with Amazon.com to more than 800 stores, supporting Enhance Customer- omnichannel strategy Centric Engagement ❑ CRM and digital customer retention initiatives making solid progress
Slide 17: Optimize Product & Service Offering
Optimize Product & Service Offering Past Present Future ❑ Simplified invoices and inspection forms Redefined Selling ❑ Clearly defined ‘Good, Better, Best’ product options Approach ❑ Educate customers on new tire installation, brake and oil change service options ❑ Improve tire sales strategy to off
Slide 18: Accelerate Productivity & Team Engagement
Accelerate Productivity & Team Engagement ❑ Achieve the right balance of labor and technical Optimized Store abilities across our stores Staffing Model ❑ Implement data-driven store scheduling software ❑ Attract, train and retain talented technicians and Clearly Defined Career Path managers and Enha
Slide 19: Monro.Forward Progress Update
Monro.Forward Progress Update Monro.Forward Initiatives Well Underway and Advancing as Planned ❑ Continued momentum of Good-Better-Best product and service packages Optimize Product & ❑ Introduction of new Tier 2 tire brands to optimize tire assortment in 4QFY19 Service Offering ❑ Will continue to r
Slide 20: Scalable Platform to Drive Sustainable Growth
Scalable Platform to Drive Sustainable Growth A Scalable Business Model with Multiple Avenues for Growth Same Store Sales Growth ▪ Through Monro.Forward, drive higher customer retention and acquisition rates Acquisitions ▪ Create value through profitable ▪ Continue to increase store density in our 3
Slide 21: A Proven M&A Strategy
A Proven M&A Strategy Monro’s Acquisition Strategy Has Delivered Significant Growth Over the Years A Proven Track Record ▪ 49 acquisitions in the last 17 fiscal years, encompassing 724 locations and $970 million of revenue ▪ 33 acquisitions in the past 7 fiscal years, adding 429 locations and $630 m
Slide 22: Fourth Quarter and Fiscal 2019 Results
Fourth Quarter and Fiscal 2019 Results Solid Fourth Quarter Performance and FY19 Results In-Line with Company Expectations 4QFY19 4QFY18 Δ FY19 FY18 Δ Sales (millions) $287.2 $285.6 0.6% $1,200.2 $1,127.8 6.4% Same Store Sales1 0.5% 2.4% (190 bps) 2.3% (0.1%) 240 bps Gross Margin 38.3% 37.7% 60 bps
Slide 23: Fiscal 2020 Outlook
Fiscal 2020 Outlook Delivering Growth Today While Continuing to Invest for Tomorrow Operating Margin FY20 FY19 Δ ▪ Assumes operating margin of ~11.3% at midpoint of FY20 sales guidance Sales (millions) $1,295 to $1,325 $1,200 8% to 10% ▪ Expect stable tire and oil costs year-over-year ▪ Expect to ge
Slide 24: Longer-Term Organic Growth Financial Targets
Longer-Term Organic Growth Financial Targets Accelerating Same Store Sales Growth Drives Operating Leverage and Double Digit Earnings Growth 5.0% SSS Improvement 4.0% + 4.0% Same Store Sales Growth ❑ Accelerate from 2% to above 4% 3.0% 2.3% 2.0% 1.0% Operating Margin ❑ Return to 12%+ Operating Margi
Slide 25: Disciplined Capital Allocation
Disciplined Capital Allocation Executing on Growth Strategy While Maintaining a Disciplined Approach to Capital Allocation Investing in the Business ▪ Capex of $44.5M during fiscal 2019 ▪ Continue to expect ~$75M of incremental Capex over 5 years to invest in store re-image and technology Executing
Slide 26: Investment Highlights
Investment Highlights ▪ Leading chain of Company-operated undercar care facilities in the U.S. with a wide breadth of product and service offerings ▪ Strong position in Northeast, Great Lakes and Mid-Atlantic and expanding into Western markets with a presence in 30 states ▪ 18 years of consecutive a
Slide 27: Appendix
Appendix 27
Slide 28: Monro.Forward Strategic Initiatives
Monro.Forward Strategic Initiatives Q4 FY18 FY19 Q2 FY19 Q3 FY19 Q4 FY19 FY20 Q2 FY20 Q3 FY20 Q4 FY20 FY21 Foundational technology & tools Pilot store refresh & Scale store refresh & operational operational excellence excellence Improve Customer Technology based in-store experience Experience Schedu