SP PLUS CORPORATION Investor Presentation

Transcription

1 SP PLUS CORPORATION Investr Presentatin Update: Q3 2018

2 Cautinary Nte Regarding Frward-Lking Statements This dcument cntains frward-lking statements, as defined in the Private Securities Litigatin Refrm Act f 1995, regarding expectatins, beliefs, plans, intentins and strategies f the Cmpany. The Cmpany has tried t identify these statements by using wrds such as "expect," "anticipate," "believe," "culd," "shuld," "estimate," "intend," "may," "plan," "guidance," "will," are t be and similar terms and phrases, but such wrds, terms and phrases are nt the exclusive means f identifying such statements. These frward-lking statements are made based n management's expectatins and beliefs cncerning future events affecting the Cmpany and are subject t uncertainties and factrs relating t peratins and the business envirnment, all f which are difficult t predict and many f which are beynd management's cntrl. Actual results, perfrmance and achievements culd differ materially frm thse expressed in, r implied by, these frward-lking statements due t a variety f risks, uncertainties and ther factrs, including, but nt limited t, the fllwing: intense cmpetitin; changing cnsumer preferences that may lead t a decline in parking demand; the Cmpany s ability t preserve lng-term client relatinships; difficulty btaining insurance cverage r btaining insurance cverage at cmpetitive rates; risk that insurance reserves are inadequate because lsses are wrse than expected; lsses nt cvered by insurance; risks assciated with management cntracts and leases; deteriratin f general ecnmic and business cnditins r changes in demgraphic trends; infrmatin technlgy disruptin, cyber attacks, cyber terrrism and security breaches; adverse litigatin judgments r settlements; breach f credit facility terms may restrict brrwing, require penalty payments r accelerate payment f the Cmpany s substantial indebtedness; the impact f public and private regulatins; financial difficulties r bankruptcy f majr clients; failure f risk management and safety prgrams t reduce the cst f risk; labr disputes; failure t attract and retain senir management and ther qualified persnnel; negative r unexpected tax events; risks assciated with jint ventures; weather cnditins, natural disasters, and military r terrrist attacks, which may lead t emergency safety measures; adverse weather cnditins that lead t fluctuating financial results; risks related t any acquisitins undertaken by the Cmpany; gdwill impairment charges r impairment f lnglived assets; the risk that state and municipal gvernment clients sell r enter int lng-term leases f parking-related assets t the Cmpany s cmpetitrs r clients; availability f adequate capital t grw the Cmpany s business; the Cmpany's ability t btain perfrmance bnds n acceptable terms; the impact f Federal health care refrm; adverse changes in tax laws r rulings, uncertainties in the interpretatin and applicatin f the 2017 Tax Cuts and Jbs Act f 2017; and actins f activist investrs. Fr a detailed discussin f factrs that culd affect the Cmpany's future perating results, please see the Cmpany's filings with the Securities and Exchange Cmmissin, including the disclsures under "Risk Factrs" in thse filings. Except as expressly required by the federal securities laws, the Cmpany undertakes n bligatin t update r revise any frward-lking statements, whether as a result f new infrmatin, changed circumstances r future events r fr any ther reasn. A cpy f this presentatin is available at under Investr Relatins. 2

3 SP+ at a Glance Largest prvider f parking management in the US Leading prvider f ancillary services including: Transprtatin Facility Maintenance Event Lgistics Operates apprximately 3,500 lcatins in the US, Canada, and Puert Ric Premier client base in Cmmercial, Institutinal, Municipal, Airprts, Hspitality, and Event/Large Venue vertical markets Operate under bth management fee (utsurce) and lease mdels Current team includes ver 20,000 highly trained and dedicated emplyees 3

4 Past, Present and Future Phase 1 Standard Standalne Phase 2 Integratin Phase 3 Optimizatin Phase 4 Acceleratin Predecessr cmpany funded in Chicag 2004 Standard Parking IPO June Standard Parking makes several strategic acquisitins 2012 Standard Parking acquires Central Parking Oct Standard Parking/Central Parking integratin cmpleted Optimize business with path t target $100MM f Adjusted EBITDA Organic and acquired grwth fcused n new prducts and services 4

5 Key Investment Highlights Market Leader with Scale Benefits Experienced high quality prvider Diverse perating prfile Turnkey slutins Multi-Faceted EBITDA Grwth Strategy Grss prfit expansin Cst reductin pprtunities Strng Financial Prfile Lwer-risk and mre predictable business Strng balance sheet Capital efficient business mdel Cnsistent and predictable free cash flw 5

6 Key Investment Highlights Market Leader with Scale Benefits Experienced Experienced High high Quality quality prvider Prvider Diverse Diverse Operating perating Prfile prfile Turnkey Turnkey Slutins slutins Multi-Faceted EBITDA Grwth Strategy Grss prfit expansin Cst reductin pprtunities Strng Financial Prfile Lwer-risk and mre predictable business Strng balance sheet Capital efficient business mdel Cnsistent and predictable free cash flw 6

7 Large and Experienced Prvider Manages apprximately 3,500 lcatins including 70 Airprts $4 billin+ grss receipts cllected per annum 2 millin+ parking spaces 750,000+ mnthly parkers 200 millin+ transient tickets prcessed per annum 37 millin passengers ride SP+ shuttle buses annually Current team includes 20,000+ highly trained and dedicated emplyees Experienced management team with extensive peratinal experience (n average, 20+ years f industry experience) Building upn mre than 80 years f successful perating histry 7

8 With High Quality Operatins Best-in-class emplyee screening and training prgrams Operatinal Excellence prgram Lss cntrl and internal audit prgrams Safety management Best-in-class client reprting capabilities Quality demnstrated by high retentin rates 8

9 Significant Presence in Highly Fragmented NA Market 9

10 Diverse Set f Vertical Markets Cmmercial Traditinal Institutinal Universities Healthcare Municipal Airprt Lcal Gvernment Hspitality Event/Large Venue 10

11 and Service Offerings TRANSPORTATION PARKING/ VALET FACILITY MAINTENANCE SECURITY METER COLLECTION / ENFORCEMENT MARKETING SERVICES TECHNOLOGY AND EQUIPMENT CONSULTING EVENT LOGISTICS 11

12 Premier Client Base 12

13 Advantages f Scale Leverage reginal management and verhead Rbust emplyee screening and training Lwer prcurement csts Equipment financing fr clients Enhanced technlgy capabilities (e.g., websites, PCI cmpliance, etc.) Advanced client reprting capabilities Ability t leverage lcal capacity fr htel valet and ther pprtunities Investment in Revenue Management and Marketing services 13

14 Unique Value Prpsitin SP+ Prvides ur Clients Scale Results / Advantages Prduces the maximum return n assets bth financial and custmer service Allws clients t fcus n cre business Breadth f Services Ability t satisfy end-custmer needs Turnkey slutins Market Expertise 14

15 Key Investment Highlights Market Leader with Scale Benefits Experienced high quality prvider Diverse perating prfile Turnkey slutins Multi-Faceted EBITDA Grwth Strategy Grss prfit expansin Cst reductin pprtunities Strng Financial Prfile Lwer-risk and mre predictable business Strng balance sheet Capital efficient business mdel Cnsistent and predictable free cash flw 15

16 Strng Grss Prfit Expansin Opprtunities Fcus n mre cmplex, higher margin vertical markets Example: municipal, airprts, institutinal, university, event/large venue and hspitality Increase penetratin f wide range f ancillary services Revenue Management and Marketing Services prgrams Reduce ttal cst f risk Operatinal Excellence prgrams Increase fcus n technlgy, marketing and ther cnsulting 16

17 KEY Service Opprtunities Exist Acrss Vertical Markets Cmmercial Institutins Municipal/ Airprts Valet Hspitality Event/ Large Venue Facility Maintenance Transprtatin/ Shuttle Equipment Cnsulting Marketing Services / Revenue Mgmt Meter Cllectin and Enfrcement Large Opprtunity Medium Opprtunity Small Opprtunity 17

18 Operatinal Excellence Prgrams Dedicated Operatinal Excellence team Analyze revenue, expense, ticket data by lcatin Assess lcatins fr additinal service fferings Optimize labr csts by cnslidating tasks and eliminating redundancies Labr and vertime scheduling and tracking Dedicated Lss Preventin team Assist in implementing cntrls t prevent and detect lsses Fcus n detecting, investigating, and reslving revenue lsses 18

19 Revenue Management and Marketing Services Demand-based pricing Inventry and channel management Parking.cm website and mbile app Interactive marketing supprt Search marketing Direct and referral traffic marketing Custm client parking guides Custm develped sign packages and cllateral Lcatin advertising packages 19

20 Grss Prfit Grwth and G&A Reductins Drive EBITDA Grwth Grw $GP Reduce Abslute G&A Csts Net new lcatin grwth Same lcatin grwth Higher penetratin f ancillary services Imprved pricing at lease lcatins Cst reductins at lease lcatins Grwth in Revenue Management and advertising prgrams Management fee CPI escalatrs Grwth in cnsulting services Reductin in ttal cst f risk Reengineer back-end supprt prcesses Strategic surcing Further realign rganizatin Tighter cst cntrls EBITDA Grwth 20

21 Key Investment Highlights Market Leader with Scale Benefits Experienced high quality prvider Diverse perating prfile Turnkey slutins Multi-Faceted EBITDA Grwth Strategy Grss prfit expansin Cst reductin pprtunities Strng Financial Prfile Lwer-risk and mre predictable business Strng balance sheet Capital efficient business mdel Cnsistent and predictable free cash flw 21

22 Lwer-Risk and Mre Predictable Business Mre than 80% f cntracts are management fee based Generally des nt fluctuate in relatin t variatins in parking vlumes Disciplined apprach t lease terms Preference fr high percentage rent / lw guaranteed rent 90% lcatin retentin ver the last twelve mnths Diverse gegraphic, vertical market, and service line ftprint 22

23 Strng Balance Sheet and Capital Efficient Mdel Amended five-year senir credit agreement with imprved pricing and ther favrable terms Mderately levered business Generates substantial free cash flw Lw capital investment requirement Negative wrking capital dynamics Fcus n capital allcatin and returning value t sharehlders Authrized $30MM share repurchase prgram Cntinue t evaluate ptins 23

24 Financial Infrmatin 24

25 Cnsistent and Attractive Financial Perfrmance Adjusted Grss Prfit ($MM) Adjusted G&A ($MM) $177.2 $176.9 $177.1 $90.0 $88.4 $83.0 $81.6 $79.4 $173.2 $ TTM Sep TTM Sep- 18 Adjusted EBITDA ($MM) Adjusted Free Cash Flw ($MM) $76.9 $82.3 $91.3 $92.1 $94.6 $94-$99 $37.4 $36.9 $46.4 $39.7 $51.7 $50-$ TTM Sep-18Est * 2015 ** 2016** 2017** TTM Sep- 18 Est. 2018** 2018 Expectatins (selected measures): $ $2.26 adjusted EPS $94MM - $99MM adjusted EBITDA $50MM - $60MM free cash flw * FCF was significantly impacted by payments n merger and integratin related csts ** 2015 t 2017 free cash flws include significantly higher cash tax payments ***2018 expectatin reflects impact f tax refrm See Nn-GAAP recnciliatin table in the Appendix fr adjusted measures. 25

26 Lng-Term Financial Objectives Grw Grss Prfit by lw/mid single-digits Cntinued G&A cst management Cntinue grwth f FCF Imprved perating results Reduced CapEx Reduced interest csts Imprved wrking capital management Utilize excess FCF t drive sharehlder value 26

27 Summary Highlights Large, high quality and experienced prvider Blue-chip client base with a demnstrated histry f client retentin Gegraphic, vertical market and service line diversity Advantages f scale Experienced management team with significant peratinal experience (n average, 20+ years f industry experience) Multi-faceted grwth strategy Unique value prpsitin cmplemented by vertical market specializatin, value-added and ancillary services and industry-leading technlgy Fcus n revenue management, risk management and peratinal excellence Strategic partnerships and acquisitins Attractive financial prfile Predminantly lwer-risk management cntracts Limited capital investment requirement Strng balance sheet Predictable free cash flw Fcus n utilizing excess FCF t drive sharehlder value 27

28 APPENDIX 28

29 GAAP t Nn-GAAP Recnciliatin - Histrical ($ thusands) Twelve Mnths Ended 12/31/ /31/ /31/ /31/2017 9/30/2018 Grss Prfit $ $ $ $ $ Add: Nn-rutine structural and ther repairs Subtract: Grss prfit related t asset sales r dispsitins (2.7) (1.4) (0.2) (8.6) 0.1 Other, runding - (0.1) (0.1) Adjusted grss prfit $ $ $ $ $ General and administrative expenses $ $ 97.3 $ 90.0 $ 82.9 $ 83.0 Subtract: Restructuring, merger/acquisitin and integratin csts, and nn-rutine settlements (8.5) (7.8) (6.8) (1.3) (3.5) Subtract: G&A related t asset sales r dispsitins (2.1) (1.0) Subtract: Parkmbile and ther cntemplated transactin csts (0.9) (0.1) - (0.1) (0.1) Other, runding - - (0.2) Adjusted G&A $ 90.0 $ 88.4 $ 83.0 $ 81.6 $ 79.4 Net incme attributable t SP Plus $ 23.1 $ 17.4 $ 23.1 $ 41.2 $ 52.0 Add (subtract): Incme tax expense (benefit) (0.2) Interest expense, net Depreciatin and amrtizatin expense Gain n sale f a business - (0.5) - (0.1) - Gain n cntributin f a business t an uncnslidated entity (4.2) Equity in lsses frm investment in uncnslidated entity (9.9) Other, runding Earnings befre interest, taxes, depreciatin and amrtizatin (EBITDA) $ 66.8 $ 69.9 $ 83.6 $ 99.2 $ 90.9 Add: Nn-rutine structural and ther repairs Add: Restructuring, merger/acquisitin and integratin csts, and nn-rutine settlements Add: Merger related minrity interest Subtract: EBITDA related t asset sales r dispsitins (0.7) (0.5) (0.2) (8.6) 0.1 Add: Parkmbile and ther cntemplated transactin csts Other, runding Adjusted EBITDA $ 76.9 $ 82.3 $ 91.3 $ 92.1 $ 94.6 Net cash prvided by perating activities $ 51.6 $ 43.6 $ 59.7 $ 45.2 $ 59.4 Net cash (used in) prvided by in investing activities (15.0) (11.8) (13.8) less: Cash received frm sale f business, net - (1.0) - (5.0) (13.6) Distributin t nncntrlling interest (2.9) (3.1) (3.3) (3.2) (3.5) Effect f exchange rate changes n cash and cash equivalents (0.2) (0.7) (0.3) 0.3 (0.4) Other, runding Free cash flw $ 33.6 $ 27.1 $ 42.4 $ 39.7 $ 51.7 Add: Cash used fr nn-rutine structural and ther repairs Other, runding - (0.1) Adjusted free cash flw $ 37.4 $ 36.9 $ 46.4 $ 39.7 $

30 GAAP t Nn-GAAP Recnciliatin 2018 Revised Outlk Net cash frm perating activities less: Capital expenditures, net less: Distributins t nn-cntrlling sharehlders Free cash flw 2018 Revised Outlk (1) Apprximately $65 - $75 millin Apprximately $10 - $14 millin Apprximately $3 - $4 millin Apprximately $50 - $60 millin (1) Revised utlk as f Octber 31,