Boyd Group Services Inc · TSX:BYD
Boyd Group Services — Boyd Group Income Fund — Investor Presentation (March 2016)
32 slides from Boyd Group Services's investor presentation, March 2016
Slide 1: Investor Presentation March 2016
Investor Presentation March 2016 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 March 23, 2016)
Capital Markets Profile (as at March 23, 2016) Stock Symbol: TSX: BYD.UN Units and Shares Outstanding*: 18.3 million Price (March 23, 2016): $70.00 52-Week Low / High: $49.05/$70.45 Market Capitalization: $1,281.0 million Annualized Distribution (per unit): $0.504 Current Yield: 0.7% Payout Ratio (T
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 $35.0 billion market • Second-largest retail auto glass operator in the U.S. • Only public company in the auto collision
Slide 5: Collision Operations
Collision Operations • 317 company operated collision locations across 19 U.S. states; 40 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) Alberta (12) 40 centers • British Columbia (11) • Saskatchewan (2) • Ontario (1) U.S. • • Illinois (54) Florida (52) 317 centers • Michigan (40) • North Carolina (26) • Indiana (21) • Washington (19) • Georgia (19) • Arizona (17) • C
Slide 7: Glass Operations
Glass Operations • Retail glass operations across 31 U.S. states Asset light business model • Third-Party Administrator business that offers Notice of Loss, glass and related services with approximately: 5,500 affiliated glass provider locations 4,600 affiliated emergency road-side service pro
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 $35.0 billion annually (U.S. $32.3B, CDA $2.7B) • 33,500 shops in the U.S. • Composition of the collision repair market in the U.S.: Large Dealer- MSO owned 1
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 19.3% from 2008 to 2014, and 57% over the past 30 years • Large multi-shop collision repair operator (“MSO”) ma
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: Collision Avoidance Systems Growing … but Impact will be Very Slow
Collision Avoidance Systems Growing … but Impact will be Very Slow • 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 opera
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 over 75% of shops 16
Slide 17: Operating Expenses as % of Sales
Expense Management Well managed operating expenses as a % of sales 45% 39.1% 38.4% 38.0% 38.0% 38.4% 38.8% 38.0% 40% 37.9% 37.8% 37.1% Operating Expenses as % of Sales 35% 30% 25% 20% 15% 10% 5% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 17
Slide 18: Same-Store Sales Growth
SSSG - Optimizing Returns from Existing Operations Same-store sales increases in 32 of 40 most recent quarters 10-year average SSSG: 4.2% 5-year average SSSG: 5.3% Same-Store Sales Growth* 3-year average SSSG: 6.1% *Total Company, excluding FX. **Adjusting for the positive impact of hail in Q4-10, Q
Slide 19: Focus on Accretive Growth
Focus on Accretive Growth • Goal: double the size of the business by 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 advantage of large acquisitions 19
Slide 20: New Location and Acquisition Growth
New Location and Acquisition Growth Collision repair locations added 288 271 242 +17 +29 178 136 +64 +42 82 45 +54 +37 2010 2011 2012 2013 2014 2015 2016 Annual additions (MSO and single locations) • May 2013: acquisition of Glass America added 61 retail auto glass locations • March 2016: acquisitio
Slide 21: Financial Review
stud J FUND Financial Review
Slide 22: Revenue Growth
Revenue Growth (C$ millions) 22
Slide 23: Adjusted EBITDA Growth
Adjusted EBITDA Growth (C$ millions) $120 $101.7 $100 $80 $69.0 $60 $41.5 $40 $29.8 $24.4 $19.0 $20 $0 2010 2011 2012 2013 2014 2015 23
Slide 24: Financial Summary
Financial Summary 3-months ended 12-months ended (C$ millions, except per unit and percent amounts) December 31, December 31, December 31, December 31, 2015 2014 2015 2014 Sales $312.5 $239.6 $1,174.1 $844.1 Gross Profit $141.5 $109.5 $536.9 $389.6 Adjusted EBITDA* $28.6 $19.0 $101.7 $69.0 Adjusted
Slide 25: Strong Balance Sheet
Strong Balance Sheet (in C$ millions) December 31, 2015 December 31, 2014 Cash $72.9 $57.5 Long-Term Debt $66.5 $56.6 Convertible Debentures* $75.1 $81.7 Obligations Under Finance Leases $13.0 $8.8 Net Debt (total debt, including current portion and bank $81.8 $89.5 indebtedness, net of cash) Net De
Slide 26: Financial Flexibility
Financial Flexibility • Cash of $72.9 million • Net Debt to EBITDA TTM ratio of 0.80x • 5-year committed facility of US$150 million which can increase to US$250 million with accordion feature, maturing July 2020 • >$400 million of “dry powder” available • Only public company in the industry Access
Slide 27: Distributions
Distributions Annualized distributions have increased by 60% since 2010 Annualized Distribution per Unit (C$) $0.55 $0.504 $0.492 $0.50 $0.480 $0.468 $0.450 $0.45 $0.420 $0.40 $0.360 $0.345 $0.35 $0.330 $0.315 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 Apr 10 - Jun 10 - Sept 10 - Dec 10 Jan 11- Nov 1
Slide 28: Five-year Return to Unitholders
Five-year Return to Unitholders Boyd Group S&P/TSX Composite S&P/TSX Income Trust 1200% 5-year 1000% total return: 906.2%* 800% 600% 400% S&P/TSX S&P/TSX Composite Income Trust 200% 12.1% 60.6% 0% -200% 31-Dec-10 31-Dec-11 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 *Source: Toronto Stock Exchange. Tota
Slide 29: Delivering long-term value to unitholders
Delivering long-term value to unitholders • Best performing company on Toronto Stock Exchange, 2005-2015 Total Return: +4,655% 12/30/2005-12/31/2015 +15.42% S&P/TSX Composite Index The Boyd Group Income Fund Source: Thomson One, includes reinvested distributions 29
Slide 30: Experienced & Committed Management Team
Experienced & Committed Management Team Brock Bulbuck President & CEO Pat Pathipati Executive Vice President & CFO Tim O’Day President & COO, U.S. Operations Eric Danberg President, Canadian Operations 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 + $35 billion fragmented industry High ROIC growth strategy Growth Market leader/consolidator in North America = Cash distributions/ Unitholder Value conservative payout ratio 5-year total unitholde
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