Boyd Group Services Inc · TSX:BYD
Boyd Group Services — Investor Presentation (March 2021)
36 slides from Boyd Group Services's investor presentation, March 2021
Slide 1: Investor Presentation
BOYD GROUP SERVICES INC. Investor Presentation March 2021 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements, other than historical facts, which reflect the view of the Company's management with respect to future events. Such forward-looking statements reflect the current views of the Company's management and are made on the b
Slide 3: Capital Markets Profile
Capital Markets Profile (as at March 26, 2021) Stock Symbol: TSX: BYD.TO Shares Outstanding: 21.5 million Price (March 26, 2021): $225.78 52-Week Low / High: $132.60/$245.00 Market Capitalization: $4,854.3 million Annualized Dividend (per share): $0.564 Current Yield: 0.2% 3
Slide 4: Company Overview
Company Overview • Leader and one of the largest operators of collision repair shops in North America by number of locations (non-franchised) • Consolidator in a highly fragmented US$40 billion market • Second largest retail auto glass operator in the U.S. • Only public company solely focused on aut
Slide 5: Collision Operations
Collision Operations • 741 company operated collision locations across 29 U.S. states and 5 Canadian provinces • Operate full-service repair centers offering collision repair, glass repair and replacement services • Strong relationships with insurance carriers • Process improvement initiatives 5
Slide 6: North American Collision Repair Footprint
North American Collision Repair Footprint Canada • • Ontario (82) British Columbia (17) 131 locations • Alberta (14) • Manitoba (14) • Saskatchewan (4) Note: The above numbers include 36 intake locations. U.S. • Michigan (73) • Louisiana (13) 610 locations • Illinois (69) • Oregon (12) • Florida (65
Slide 7: Glass Operations
Glass Operations • Retail glass operations across 35 U.S. states ▪ Asset light business model • Third-Party Administrator (“TPA”) business that offers glass, emergency roadside and first notice of loss services with approximately: ▪ 5,500 affiliated glass provider locations ▪ 4,600 affiliated emerge
Slide 8: North American Glass Footprint
North American Glass Footprint U.S. • Alabama • Nevada • Arizona • New Hampshire • California • New York • Colorado • North Carolina • Connecticut • Ohio • District of Columbia • Oklahoma • Florida • Oregon • Georgia • Pennsylvania • Idaho • Rhode Island • Illinois • Tennessee • Indiana • Texas • Ke
Slide 9: Market Overview & Business Strategy
Market Overview & Business Strategy 9
Slide 10: Large, Fragmented Market
Large, Fragmented Market U.S. Collision Repair Market • Revenue for North American collision repair industry is estimated to be approximately US$41.2 billion annually (U.S. $38.3B, CDA $2.9B) • 31,800 shops in the U.S., 4,430 shops in Canada • Composition of the collision repair market in the U.S.:
Slide 11: Evolving Collision Repair Market
Evolving Collision Repair Market • Large multi shop collision repair operator (“MSO”) market share opportunity ▪ The top 3 consolidators represent an 18.8% share of collision repair revenue in 2019 as compared to 15.7% in 2018 and only 1.7% in 2006. ▪ 106 MSOs had revenues of $20 million or greater
Slide 12: Strong Relationships with Insurance Companies through DRPs
Strong Relationships with Insurance Companies through DRPs • Direct Repair Programs (“DRPs”) are established between insurance companies and collision repair shops to better manage auto repair claims and the level of customer satisfaction • Auto insurers utilize DRPs for a growing percentage of coll
Slide 13: Insurer Market Dynamics
Insurer Market Dynamics Top 10 Insurer Market Share (U.S.) Insurer DRP Usage Other Insurers 27.0% Other 40.5% DRP Top 10 59.5% Insurers 73.0% Source: The Romans Group, 2019 13
Slide 14: Impact of Collision Avoidance Systems
Impact of Collision Avoidance Systems • CCC estimates technology will * reduce accident frequency by ~30% in next 25-30 years • As per industry studies, decline should be somewhat offset by increases in average cost of repair (increased expense of technology) and vehicle miles driven • Large operato
Slide 15: Business Strategy
Business Strategy Expense management Operational excellence Enhance SHARE Shareholder THE BOYD HOLDERS GROUP Value Same-store sales growth New location and and optimize returns from acquisition growth existing operations 15
Slide 16: Operational Excellence
Operational Excellence • Best-in-Class Service Provider ▪ Average cost of repair ▪ Cycle time ▪ Customer service ▪ Quality ▪ Integrity • “WOW” Operating Way ▪ Embedded as part of our operating culture • Company-wide diagnostic repair scanning technology • I-Car Gold Class facilities • Industry leade
Slide 17: Operating Expenses as % of Sales (Pre-IFRS)
Pre-IFRS 16 - Expense Management Well managed operating expenses as a % of sales 40.0% 37.1% 36.8% 36.5% 35.9% 36.0% Operating Expenses as % of Sales 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2015 2016 2017 2018 2019 *Operating expenses as a % of sales for are shown on a Pre-IFRS 16 basis for co
Slide 18: Operating Expenses as % of Sales (Post-IFRS)
Post-IFRS 16 - Expense Management 35.0% 31.4% 32.0% Operating Expenses as % of Sales 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2019 2020 *Operating expenses as a % of sales for 2019 and 2020 are shown on a Post-IFRS 16 basis. **Results for 2020 were severely impacted by the COVID-19 Pandemic 18
Slide 19: Same-Store Sales Growth
SSSG - Optimizing Returns from Existing Operations Same-store sales increases in 32 of 40 most recent quarters 15.00% 10-year average SSSG: 4.5% 5-year average SSSG: 3.6% 10.00% Same-Store Sales Growth* 3-year average SSSG: 3.6% 5.00% 0.00% -5.00% -10.00% -15.00% -20.00% -25.00% -30.00% -35.00% Q1-1
Slide 20: Focus on Accretive Growth
Focus on Accretive Growth • Goal: double the size of the business during the five-year period from 2021 to 2025, based on 2019 revenues, on a constant currency basis • Implied compound average annual growth rate of 15%: • Same-store sales • Acquisition or development of single locations • Acquisitio
Slide 21: U.S. Dollar Reporting
U.S. Dollar Reporting • To reduce volatility from exchange rates, effective January 1, 2021, Boyd will begin reporting results in U.S. Dollars. • Given almost 90% of Boyd’s revenues come from the U.S., this is considered an appropriate currency for reporting purposes. U.S. > 90% Insurance 21
Slide 22: Strong Growth in Collision Locations
Strong Growth in Collision Locations 108 741 105 81 64 54 58 42 29 2013 2014 2015 2016 2017 2018 2019 2020 Annual additions Total locations • May 2013: acquisition of Glass America added 61 retail auto glass locations • March 2016: acquisition of 4 retail auto glass locations *Results for 2020 were
Slide 23: Financial Review
Financial Review THE pp Boyd GROUP
Slide 24: Revenue Growth
Revenue Growth (C$ millions) $2,500 $2,283.3 $2,089.1 $2,000 $1,864.6 $1,569.4 $1,500 $1,387.1 $1,000 $500 $0 2016 2017 2018 2019 2020 *Results for 2020 were severely impacted by the COVID-19 Pandemic 24
Slide 25: Pre-IFRS 16 Adjusted EBITDA Growth
Pre-IFRS 16 - Adjusted EBITDA Growth (C$ millions) $300 $250 $215.6 $200 $173.4 $145.6 $150 $124.3 $101.7 $100 $50 $0 2015 2016 2017 2018 2019 *Adjusted EBITDA for 2019 is shown on a Pre-IFRS 16 basis for comparative purposes. 25
Slide 26: Post-IFRS 16 Adjusted EBITDA
Post-IFRS 16 - Adjusted EBITDA (C$ millions) 1-YR Decline of 8.23% $319.9 $293.6 $300 $250 $200 $150 $100 $50 $0 2019 2020 *IFRS 16 was adopted effective January 1, 2019 **Results for 2020 were severely impacted by the COVID-19 Pandemic 26
Slide 27: Q4 2020 Financial Summary
Q4 2020 Financial Summary 3-months ended 12-months ended (C$ millions, except per unit/share and percent amounts) Dec 31, Dec 31, Dec 31, Dec 31, 2020 2019 2020 2019 Sales $526.0 $586.0 $2,089.1 $2,283.3 Gross Profit $240.9 $263.7 $961.9 $1,036.5 Adjusted EBITDA* $78.4 $84.1 $293.6 $319.9 Adjusted E
Slide 28: Strong Balance Sheet
Strong Balance Sheet (in C$ millions) Dec 31, 2020 Dec 31, 2019 Cash $77.7 $35.5 Long-Term Debt $229.5 $415.3 Net Debt before lease liabilities (total debt, including current portion and bank $151.7 $379.8 indebtedness, net of cash) Lease liabilities $533.8 $513.4 Total debt, net of cash $685.6 $893
Slide 29: Financial Flexibility
Financial Flexibility • Cash of $77.7 million • Net Debt to EBITDA TTM ratio of 0.9x • 5-year committed facility of US$550 million which can increase to US$825 million with remaining accordion feature, maturing May 2025 • 7-Year fixed-rate Term Loan A in the amount of US$125 million, maturing May 20
Slide 30: Dividends
Dividends Annualized dividends have increased by 9.3% since 2016 Annualized Dividend per Share (C$) $0.60 0.564 0.552 $0.55 0.540 0.528 0.516 $0.50 $0.45 $0.40 Nov 16 - Nov 17 - Nov 18 - Nov 19 - Nov 20 - Oct 17 Oct 18 Oct 19 Present Present 30
Slide 31: Five-year Return to Shareholders
Five-year Return to Shareholders Boyd Group S&P/TSX Composite S&P/TSX Income Trust 300% 5-year 250% total return: 243.87%* 200% 150% S&P/TSX S&P/TSX 100% Composite Income Trust 34.00% 21.99% 50% 0% -50% 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 *Source: Irwin. Total return based on
Slide 32: Delivering long-term value to shareholders
Delivering long-term value to shareholders • Best or second best 10-year performance on the TSX for 6 consecutive years • Best 10-year performance on the TSX in 2015 and 2016 • Second best 10-year performance on the TSX in 2017, 2018, 2019 and 2020 +9966.5% 10-year Total Return +5795.6% +5901.2% +46
Slide 33: Experienced & Committed Management Team
Experienced & Committed Management Team Timothy O’Day Narenda “Pat” Pathipati Brock Bulbuck President & CEO Executive Vice-President & CFO Executive Chair 33
Slide 34: COVID-19 Impact and Outlook
COVID-19 Impact and Outlook • COVID 19 began to significantly impact the business just prior to the end of Q1 2020 and continues to impact results. • Boyd continues to take proactive steps to adapt to the new environment, including increased health and safety practices such as contactless drop off &
Slide 35: Canadian Emergency Wage Subsidy (CEWS)
Canadian Emergency Wage Subsidy ("CEWS") • CEWS was put into place on April 11, 2020 and has now been extended to June 2021 • As is the objective of the program, Boyd has been able to retain more of its employees than would have been possible, absent the subsidy • Boyd will continue to make applicat
Slide 36: Summary
Summary ✓ Strong balance sheet Stability ✓ Insurer preference for MSOs ✓ Recession Resilient + ✓ US$40 billion fragmented industry ✓ High ROIC growth strategy Growth ✓ Market leader/consolidator in North America = ✓ Cash dividends/conservative payout ratio Shareholder Value ✓5-year total shareholder
Boyd Group Services — Investor Presentation (March 2021) on 6ix