Frontdoor, Inc. · NASDAQ:FTDR
Frontdoor — Q4 2018 Earnings Presentation
18 slides from Frontdoor's earnings presentation, Feb 27, 2019
Slide 1: Fourth-Quarter & Full Year 2018 Earnings Webcast
Fourth-Quarter & Full Year 2018 Earnings Webcast February 27, 2019 1
Slide 2: Forward Looking Statements; Non-GAAP Financial Measures
Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, projected future performance and any statements
Slide 3: Agenda
Rex Tibbens Brian Turcotte Matt Davis Chief Executive Officer SVP & Chief Financial Officer VP IR and Treasury Agenda • FY 2018 Summary • Q4 & FY 2018 Financials • Business Update • FY 2019 Outlook 3
Slide 4: Full-Year 2018 Summary
Full-Year 2018 Summary Revenue increased 9% to $1.26 billion Adjusted EBITDA of $238 million Adjusted EBITDA margin of 19% Home Service Plans increased 6% to 2.1 million Strong Customer Retention Rate of 75% Process improvements driving business results Continued to add to strong leadership team Est
Slide 5: Business Update
Business Update • Growing customer base through increased marketing • Continuing to invest in digital advertising Direct-to-Consumer • Renewing focus on core markets Real Estate • Improving spend efficiency • Piloting new services; completed home re-key roll out • Improving key customer service metr
Slide 6: 2019 Strategic Objectives
2019 Strategic Objectives Customer Experience Enhancing the Customer Experience Optimizing Pricing / Pricing Launching Dynamic Pricing Business Processes/ Managing to the Inputs Cost Containment of the Business Building a Fast-Moving Culture / People Enabling Frontline Employees Technology Advancing
Slide 7: Q4 2018 Financial Summary
Q4 2018 Financial Summary Three Months Ended December 31, $ millions, except per share amounts 2018 2017 Change Revenue 279 257 9 % Gross Profit 125 120 3 % Net Income 17 44 (62) % Diluted Earnings per Share 0.20 0.52 (62) % Adjusted Net Income (1) 19 31 (38) % Adjusted Diluted Earnings per Share (1
Slide 8: FY 2018 Financial Summary
FY 2018 Financial Summary Year Ended December 31, $ millions, except per share amounts 2018 2017 Change Revenue 1,258 1,157 9 % Gross Profit 572 567 1 % Net Income 125 160 (22) % Diluted Earnings per Share 1.47 1.90 (23) % Adjusted Net Income (1) 150 158 (5) % Adjusted Diluted Earnings per Share (1)
Slide 9: Q4 2018 vs. Q4 2017 Adjusted EBITDA Bridge
Q4 2018 vs. Q4 2017 Adjusted EBITDA Bridge $ millions 13 $50 $47 (9) (3) (2) (1) (2) Q4 '17 Revenue Claims Cost Sales & Customer Spin-off Other Q4 '18 Conversion Marketing Service Costs Dis-synergies Note: Revenue and expense items are year-over-year increases/(decreases); amounts presented in table
Slide 10: Full-Year 2018 vs. Full-Year 2017 Adjusted EBITDA Bridge
Full-Year 2018 vs. Full-Year 2017 Adjusted EBITDA Bridge $ millions 64 $259 $238 (58) (10) (8) (4) (5) FY '17 Revenue Claims Cost Sales & Customer Spin-off Other FY '18 Conversion Marketing Service Costs Dis-synergies Note: Revenue and expense items are year-over-year increases/(decreases); amounts
Slide 11: FY2018 Cash Flow and Cash Position
FY2018 Cash Flow and Cash Position Year Ended December 31, $ millions 2018 2017 Net cash provided from (used for): Operating Activities $ 189 $ 194 Investing Activities (10) (11) Financing Activities (165) (68) Cash increase during the period $ 14 $ 114 Note: Amounts presented in table may not sum d
Slide 12: Full-Year 2019 Outlook
Full-Year 2019 Outlook 2018 Results 2019 Outlook Low High Revenue ($ billions) 1.26 1.35 $ 1.38 Gross Profit Margin 45% ~45% Adjusted EBITDA ($ millions)(1) 238 240 255 Capital Expenditures ($ millions) 27 30 40 Annual Effective Tax Rate (2) 25% ~24% (1) A reconciliation of the forward-looking full-
Slide 13: Q&A
Q&A For more information please visit our website: www.frontdoorhome.com 13
Slide 14: Appendix
Appendix 14
Slide 15: Q4 2018 Consolidated Results
Q4 2018 Consolidated Results $ millions, except per share amounts Three Months Ended December 31, 2018 2017 Better / (Worse) Revenue $ 279 $ 257 $ 22 YoY Growth 9% Gross Profit 125 120 4 % of revenue 44.6% 46.8% (2.2) pts Selling and administrative expenses 80 71 (9) % of revenue 28.6% 27.6% (1.0) p
Slide 16: FY 2018 Consolidated Results
FY 2018 Consolidated Results $ millions, except per share amounts Year Ended December 31, 2018 2017 Better / (Worse) Revenue $ 1,258 $ 1,157 $ 102 YoY Growth 9% Gross Profit 572 567 5 % of revenue 45.5% 49.0% (3.6) pts Selling and administrative expenses 338 312 (27) % of revenue 26.9% 26.9% 0.1 pts
Slide 17: Net Income to Adjusted EBITDA Reconciliations
Net Income to Adjusted EBITDA Reconciliations $ millions Three Months Ended Year Ended December 31, December 31, 2018 2017 2018 2017 Net Income $ 17 $ 44 $ 125 $ 160 Depreciation and amortization expense 6 4 21 17 Restructuring charges — 1 3 7 Spin-off charges 1 7 24 13 Provision for income taxes 6
Slide 18: Net Income to Adjusted Net Income Reconciliations
Net Income to Adjusted Net Income Reconciliations $ millions, except per share amounts Three Months Ended Year Ended December 31, December 31, 2018 2017 2018 2017 Net Income $ 17 $ 44 $ 125 $ 160 Amortization expense 2 2 8 8 Restructuring charges — 1 3 7 Spin-off charges 1 7 24 13 Affiliate royalty