Uni-Select — Q2 2019 Earnings Presentation
33 slides from Uni-Select's earnings presentation, Aug 7, 2019
Slide 1: Q2 2019 Conference Call
Q2 2019 (Ended June 30, 2019) Conference Call August 7, 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: Adoption of IFRS 16 - Leases
Adoption of IFRS 16 - Leases On January 1, 2019, the Corporation applied, for the first time, IFRS 16 - Leases using the modified retrospective transition approach and did not restate comparative amounts of the year prior to its adoption as permitted. As a result, the 2019 interim condensed consolid
Slide 4: Q2 2019 Highlights
UNI-SELECT. THE POWER OF TEAMWORK * Q2 2019 Highlights
Slide 5: 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 The U.K. had a challenging first half of 2019 due to macroeconomic dynamics 5
Slide 6: Consolidated Results - Q2 2019 Highlights
Consolidated Results - Q2 2019 Highlights Financial Results HIGHLIGHTS Q2-18 Q2-19 VAR Excluding FX, sales increased 1.2% driven by Sales 461.6 456.2 (1.2%) acquisitions and organic growth(1), partially Organic growth(1) 1.2% offset by the # of billing days EBT 21.0 8.5 (59.4%) Organic growth(1)
Slide 7: Performance Improvement Plan (“PIP”) - Update
Performance Improvement Plan (“PIP”) - Update Cost Saving Annualized Estimated Period Description Program Savings Costs To improve efficiencies in all 3 business Second half of 2017 20/20 Initiative $20M by 2020 units To further improve efficiencies in all November 2018 25/20 Initiative $5M by 2020
Slide 8: Performance Improvement Plan (“PIP”) - Update
Performance Improvement Plan (“PIP”) - Update Expected Expected Realized Schedule By the end As at YTD As at 2nd half of 2020 Dec. 2018 Q2-19 June 2019 2019 Annualized cost savings $45.0 $18.7 $10.5 $29.2 $15.8 (M$) Restructuring charges(1) $9.5 $5.1 $2.0 $7.0 $2.5 Other charges as $7.0 $1.2 $2.7 $3
Slide 9: 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 10: FinishMaster US - Q2 2019 Highlights
FinishMaster US - Q2 2019 Highlights Financial Results HIGHLIGHTS Q2-18 Q2-19 VAR Sales 211.0 212.2 0.6% Sales increased 0.6%, driven by organic growth(1), despite collision claims down Organic growth(1) 0.7% 2.6%(2), according to market data & EBT 17.1 10.4 (39.1%) management estimates EBT%(1) 8.
Slide 11: Canadian Automotive Group - Q2 2019 Highlights
Canadian Automotive Group - Q2 2019 Highlights Financial Results HIGHLIGHTS Q2-18 Q2-19 VAR Excluding FX sales increased 6.5%, primarily Sales 139.6 143.4 2.8% explained by organic growth(1) and the Organic growth(1) 5.5% contribution of acquisitions, exceeding the EBT 6.9 10.6 53.0% effect of # o
Slide 12: The Parts Alliance UK - Q2 2019 Highlights
The Parts Alliance UK - Q2 2019 Highlights HIGHLIGHTS Financial Results Excluding FX, sales decreased 4.2% due to Q2-18 Q2-19 VAR negative organic growth(1)and # of billing days, Sales 111.0 100.5 (9.5%) partially offset by acquisitions Organic growth(1) (3.2%) Negative organic growth(1) of 3.2%
Slide 13: Q2 2019 Financial Review
UNI-SELECT. THE POWER OF TEAMWORK " Q2 2019 Financial Review
Slide 14: Sales
Sales Q2 Total Sales by Business Segment TTM Total Sales by Business Segment 461.6 456.2 1,744.5 (1.2%) 1,694.5 +3.0%(2) 111.0 100.5 369.8 400.0 139.6 143.4 506.9 510.1 211.0 212.2 817.8 834.4 Q2-18 Q2-19 TTM Q2-18 TTM Q2-19 FinishMaster US Canadian Automotive Group (1) The Parts Alliance UK FinishM
Slide 15: Consolidated EBITDA and Adjusted EBITDA
Consolidated EBITDA(1) and Adjusted EBITDA(1) Q2-19 Q2-18 VAR EBITDA as reported(1) 31.7 35.4 (10.5%) % sales 7.0% 7.7% (70 bps) Special items 4.1 0.1 Adjusted EBITDA(1) 35.8 35.6 0.7% % sales 7.8% 7.7% 10 bps IFRS 16 impact (6.9) - Proforma adjusted EBITDA(1) 28.9 35.6 (18.8%) % sales 6.3% 7.7% (14
Slide 16: EBT and Adjusted EBT
EBT and Adjusted EBT(1) Q2 EBT by Business Segment Q2 Adj. EBT(1) by Business Segment 22.3 21.0 6.5 13.9 6.5 8.5 6.9 6.9 11.2 10.6 17.1 17.1 10.4 11.6 4.6% -1.4 1.9% 4.8% 3.0% -9.5 -1.4 -11.1 -8.3 -7.6 Q2-18 Q2-19 Q2-18 Q2-19 EBT margin Adj. EBT margin (1) FinishMaster US Canadian Automotive Group F
Slide 17: Earnings and EPS
Earnings(1) and EPS(1) Earnings(1) EPS(1) 17.9 18.4 0.42 0.44 10.4 0.25 6.3 0.15 Q2 Net Earnings Q2 Adj. Earnings (1) Q2 EPS Q2 Adj. EPS (1) Q2-18 Q2-19 Q2-18 Q2-19 Q2-19 Adj. earnings(1) decreased by $8.0M mainly resulting from a lower adjusted EBT and a change in the proposed U.S. tax regulations
Slide 18: Cash Flow & FCF
Cash Flow & FCF(1) Cash Flow from Operations Free Cash Flow(1) 109.5 113.7 97.2 Favorable timing 93.7 96.0 of the vendor Lower level of financing income tax transactions instalments 38.9 27.9 32.1 Q2 TTM Q2 TTM 2018 2019 2018 2019 Q2-19 cash flow from operations increased mainly resulting from the t
Slide 19: 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 Q3-19 will be impacted by a one-time $55M cash outflow that is expected to 2019E (69) 97 be largely offset by internally generat
Slide 20: Financial Position
Financial Position Total Net Debt(1) Funded Debt to Adj. EBITDA(1) Lease obligations are 627 included in debt since Q1-19 4.47x 118 534 3.98x 3.60x 3.50x 450 107 3.12x 394 419 Favorable timing of vendor financing and internally generated cash flow allowed for $93M of reimbursement of the credit faci
Slide 21: Guidance
UNI-SELECT. THE POWER OF TEAMWORK * GUIDANCE
Slide 22: 2019 Consolidated Guidance Reiterated
2019 Consolidated Guidance Reiterated 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%
Slide 23: Conclusion
Conclusion • Start to materialize cost savings in a more meaningful way starting in Q3-19 • Accelerate the execution of the PIP at FinishMaster and anticipate margins to start stabilizing • Execute new cost saving initiatives at TPA to counter macroeconomic challenges in the U.K. • Build on the soli
Slide 24: Appendix
UNI-SELECT. THE POWER OF TEAMWORK ' APPENDIX
Slide 25: 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 26: 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 27: 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 liabilities arising from the adoption of IFRS 16, for which the initial amount recorded w
Slide 28: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Reconciliation of consolidated Organic growth Second quarters YTD 2019 2018 2019 2018 FinishMaster US 212.2 211.0 416.8 412.3 Canadian Automotive Group 143.4 139.6 256.6 250.2 The Parts Alliance UK 100.5 111.0 202.9 221.1 Sales 456.2 461.6 876.2 883.7 % % Sales v
Slide 29: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Reconciliation of EBITDA Second quarters YTD 2019 2018 % 2019 2018 % Net earnings (loss) 6.3 17.9 5.0 28.3 Income tax expense 2.2 3.2 2.3 4.9 Depreciation and amortization 15.8 9.5 31.6 19.4 Finance costs, net 7.4 4.9 14.2 9.9 EBITDA 31.7 35.4 (10.5) 53.1 62.4 (1
Slide 30: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Reconciliation of EBT and Adjusted EBT Second quarters YTD 2019 2018 % 2019 2018 % Net earnings (loss) 6.3 17.9 5.0 28.3 Income tax expense 2.2 3.2 2.3 4.9 EBT 8.5 21.0 (59.4) 7.2 33.1 (78.1) EBT margin 1.9% 4.6% 0.8% 3.8% Special items 4.1 0.1 11.2 0.7 Amortizat
Slide 31: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Reconciliation of Adjusted Earnings and Adjusted EPS Second quarters YTD 2019 2018 % 2019 2018 % Net earnings (loss) 6.3 17.9 (64.7) 5.0 28.3 (82.4) Special items, net of taxes 3.1 (0.4) 8.4 0.2 Amortization of intangible assets related to the acquisition 1.0 0.9
Slide 32: Non-IFRS Financial Measures (cont’d)
Non-IFRS Financial Measures (cont’d) Reconciliation of Free cash flows Second quarters YTD 2019 2018 2019 2018 Cash flows from operating activities 97.2 38.9 27.7 8.6 Changes in working capital (59.5) (8.2) 35.6 33.6 Acquisitions of property and equipment (5.7) (2.7) (11.7) (6.6) Difference between
Slide 33: UNI-SELECT.
UNI-SELECT. UNISELECT.COM 33