Boyd Group Services Inc · TSX:BYD
Boyd Group Services — Investor Presentation (May 2017)
32 slides from Boyd Group Services's investor presentation, May 2017
Slide 1: Investor Presentation
Investor Presentation May 2017 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 Fund's management with respect to future events. Such forward-looking statements reflect the current views of the Fund's management and are made on the basis o
Slide 3: Capital Markets Profile (as at May 12, 2017)
Capital Markets Profile (as at May 12, 2017) Stock Symbol: TSX: BYD.UN Units and Shares Outstanding*: 18.3 million Price (May 12, 2017): $89.76 52-Week Low / High: $71.60/$92.75 Market Capitalization: $1,642.6 million Annualized Distribution (per unit): $0.516 Current Yield: 0.6% Payout Ratio (TTM**
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$36.4 billion market • Second-largest retail auto glass operator in the U.S. • Only public company in the auto collisi
Slide 5: Collision Operations
Collision Operations • 364 company operated collision locations across 20 U.S. states; 42 company operated locations in Canada • Operate full-service repair centers offering collision repair, glass repair and replacement services • Strong relationships with insurance carriers • Advanced management s
Slide 6: North American Collision Repair Footprint
North American Collision Repair Footprint Canada • • Manitoba (14) British Columbia (13) 42 centers • Alberta (12) • Saskatchewan (2) • Ontario (1) U.S. • • Florida (57) Illinois (54) 364 centers • Michigan (47) • North Carolina (31) • Indiana (24) • Ohio (22) • Georgia (21) • Arizona (20) • Washing
Slide 7: Glass Operations
Glass Operations • Retail glass operations across 31 U.S. states Asset light business model • Third-Party Administrator business that offers glass, emergency roadside and first notice of loss services with approximately: 5,500 affiliated glass provider locations 4,600 affiliated emergency road
Slide 8: North American Glass Footprint
North American Glass Footprint U.S. • Alabama • Arizona • Colorado • Connecticut • District of Columbia • Florida • Georgia • Idaho • Illinois • Indiana • Kentucky • Louisiana • Massachusetts • Maryland • Michigan • Missouri • Nevada • New Hampshire • New York • North Carolina • Ohio • Oklahoma • Or
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$36.4 billion annually (U.S. $34.1B, CDA $2.3B) • 32,900 shops in the U.S. • Composition of the collision repair market in the U.S.: Dealer- Large MSO owned
Slide 11: Evolving Collision Repair Market
Evolving Collision Repair Market • Long-term decline of independent and dealership repair facilities Total number of independent and dealership collision repair locations has declined by 23.5% from late 2007 to 2015, and 59% over the past 35 years • Large multi-shop collision repair operator (“MSO
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 Insurer DRP Usage Source: National Association of Insurance Commissioners Source: The Romans Group 13
Slide 14: Impact of Collision Avoidance Systems
Impact of Collision Avoidance Systems • CCC estimates technology will reduce accident frequency by ~20% 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) • Large operators could also mitigate mark
Slide 15: Business Strategy
Business Strategy Operational Expense excellence management Enhance UNIT Unitholder THE BOYD HOLDERS GROUP Value Same-store sales growth and optimize returns New location and from existing operations acquisition growth 15
Slide 16: Operational Excellence – WOW Operating Way
Operational Excellence – WOW Operating Way • Best-in-Class Service Provider Average cost of repair Cycle time Customer service Quality Integrity • “WOW” Operating Way Implemented in all of our locations other than those added in the last 12 months 16
Slide 17: Expense Management: Operating Expenses as % of Sales
Expense Management Well managed operating expenses as a % of sales 45% 40% 38.0% 38.4% 38.8% 38.0% 37.1% 36.8% Operating Expenses as % of Sales 35% 30% 25% 20% 15% 10% 5% 0% 2011 2012 2013 2014 2015 2016 17
Slide 18: Same-Store Sales Growth
SSSG - Optimizing Returns from Existing Operations Same-store sales increases in 33 of 40 most recent quarters 10-year average SSSG: 4.5% 5-year average SSSG: 4.8% Same-Store Sales Growth* 13% 3-year average SSSG: 5.7% 8% 3% -2% -7% Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q
Slide 19: Focus on Accretive Growth
Focus on Accretive Growth • Goal: double the size of the business during the five-year period ending in 2020* • Implied average annual growth rate of 15%: Same-store sales Acquisition or development of single locations Acquisition of multiple-location businesses • Well-positioned to take advan
Slide 20: Strong Growth in Locations
Strong Growth in Locations 150 450 406 130 400 350 110 300 90 250 70 200 64 50 58 54 150 42 30 37 100 29 10 50 10 -10 0 2011 2012 2013 2014 2015 2016 YTD 2017 Annual additions Total locations • May 2013: acquisition of Glass America added 61 retail auto glass locations • March 2016: acquisition of 4
Slide 21: Financial Review
Financial Review 21
Slide 22: Revenue Growth
Revenue Growth (C$ millions) $1,600 $1,387.1 $1,400 $1,174.1 $1,200 $1,000 $844.1 $800 $578.3 $600 $434.4 $400 $357.0 $200 $0 2011 2012 2013 2014 2015 2016 22
Slide 23: Adjusted EBITDA Growth
Adjusted EBITDA Growth (C$ millions) $140 $124.3 $120 $101.7 $100 $80 $69.0 $60 $41.5 $40 $29.8 $24.4 $20 $0 2011 2012 2013 2014 2015 2016 23
Slide 24: Financial Summary
Financial Summary 3-months ended (C$ millions, except per unit and percent amounts) March 31, March 31, 2017 2016 Sales $378.9 $350.4 Gross Profit $173.1 $158.1 Adjusted EBITDA* $32.8 $29.5 Adjusted EBITDA Margin* 8.7% 8.4% Adjusted Net Earnings* $13.9 $12.8 Adjusted Net Earnings* per unit $0.771 $0
Slide 25: Strong Balance Sheet
Strong Balance Sheet (in C$ millions) March 31, 2017 December 31, 2016 Cash $54.7 $53.5 Long-Term Debt $106.9 $101.6 Convertible Debentures* $51.0 $50.8 Obligations Under Finance Leases $10.9 $11.9 Net Debt (total debt, including current portion and bank $114.1 $110.8 indebtedness, net of cash) Net
Slide 26: Financial Flexibility
Financial Flexibility • Cash of $54.7 million • Net Debt to EBITDA TTM ratio of 0.89x • 5-year committed facility of US$150 million which can increase to US$250 million with accordion feature, maturing July 2020 • Approximately $350 million of “dry powder” available • Only public company in the indu
Slide 27: Distributions
Distributions Annualized distributions have increased by 22.9% since 2011 Annualized Distribution per Unit (C$) $0.55 $0.516 $0.504 $0.492 $0.50 $0.480 $0.468 $0.450 $0.45 $0.420 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 Jan 11- Nov 11 - Nov 12 - Nov 13 - Nov 14 - Nov 15 - Nov 16 - Oct 1
Slide 28: Five-year Return to Unitholders
Five-year Return to Unitholders Boyd Group S&P/TSX Composite S&P/TSX Income Trust 1000% 5-year 800% total return: 742.4%* 600% 400% S&P/TSX 200% Composite 27.9% 0% S&P/TSX Income Trust 13.8% -200% 31-Dec-11 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 *Source: Toronto Stock Exchange. Total retu
Slide 29: Delivering long-term value to unitholders
Delivering long-term value to unitholders • Two consecutive years best 10-year performance on TSX 2005-2015 2006-2016 +9,966.5% +4,655% +58.6% +15.4% S&P/TSX BYD.UN S&P/TSX BYD.UN Composite Index Composite Index Source: Thomson One, includes reinvested distributions 29
Slide 30: Experienced & Committed Management Team
Experienced & Committed Management Team Brock Bulbuck Pat Pathipati Tim O’Day CEO Executive President & COO Vice-President & CFO 30
Slide 31: Outlook
Outlook • Increase North American presence through: Drive same-store sales growth through enhanced capacity utilization, development of DRP arrangements and leveraging existing major and regional insurance relationships Acquire or develop new single locations as well as the acquisition of multi-
Slide 32: Summary
Summary Strong balance sheet Stability Insurer preference for MSOs Recession resilient + US$36.4 billion fragmented industry High ROIC growth strategy Growth Market leader/consolidator in North America = Cash distributions/ Unitholder Value conservative payout ratio 5-year total unith
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