Investor Day Corporate Overview Henry Buckley, President & CEO and Eric Bussières, CFO November 28, 2017
Preliminary Comments Forward-looking statements: The information provided in this presentation contains some forward-looking information, which includes certain risks and uncertainties, and may cause the final results to be significantly different from those listed or implied within this presentation. For additional information with respect to risks and uncertainties, refer to the Annual Report filed by Uni-Select with the Canadian securities commissions. The forward-looking information contained herein is made as of the date of this presentation, and Uni-Select does not undertake to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws. p2
Agenda Corporate Overview Industry Landscape Financial Results Strategic Priorities Value Creation Drivers Conclusion p3
Uni-Select estimated normalized run rate revenues reached US$ 1.7B per year as of October 2017 20% Sales by Region 30% 50% Sales by Industry 54% 46% US Canada UK Automotive aftermarket parts Automotive paint & related products Estimated run rate revenues ($US M) per year as of October 2017 US Canada UK Total Revenues by geographic region ~840 ~480 ~380 ~1 700 #1 player #2 player #2 player Leadership position in each of its core markets p4
A dedicated & experienced Executive Team Henry Buckley President and Chief Executive Officer Brent Windom President and Chief Operating Officer, Canadian Automotive Group Steve Arndt President and Chief Operating Officer, FinishMaster US Peter Sephton President and Chief Executive Officer, European Automotive Group Eric Bussières Chief Financial Officer Annie Hotte Chief People Officer Louis Juneau Chief Legal Officer & Corporate Secretary p5
Strong coverage in each geographical market Extensive distribution coverage US Canada UK Total Distribution centres 4 10 2 16 Independent customer locations served 0 1,100 27 1,127 Corporate stores operated 212 61 171 444* Installer and Collision Repair customers served 6,800 16,000 23,400 46,200 Team members 1,900 1,300 2,800 6,000 *Number of locations as at October 31, 2017 US$1.5 billion in assets as at September 30, 2017 p6
Canadian Automotive Group: A 2-step and 3-step distribution model Automotive Aftermarket Parts National + Private Brands Manufacturers Paint & Related Products Manufacturers Drop Ship Capability 10 Distribution Centres Drop Ship Capability Bumper to Bumper Corporate Stores Independent Member Parts Stores FinishMaster Corporate Stores 2-Step 3-Step 2-Step Independent Garages National Accounts Collision Repair Centres p7
FinishMaster US A 2-step distribution model Paint & Related Products Manufacturers and Private Brands Drop Ship 4 Distribution Centres 212 FinishMaster Corporate Stores 2-Step 6,800 Collision Repair Centre Customers p8
The Parts Alliance A 2-step distribution model Member of the Nexus Buying Group OEM Products National Brands Private Brands Manufacturers 2 Distribution Centres Primarily Private Brands 171 Parts Alliance Corporate Stores 2-Step 27 Independent Member Parts Stores 2-Step Part of Parts Alliance Trading Group p9
A proven track record of successful acquisitions United States Canada United Kingdom 2015: 8 2016: 7 2017: 4 TOTAL: 19 2015: 8 2016: 7 2017: 3 TOTAL: 18 2015: 1 2016: 3 2017: 2 TOTAL: 5 In 2016, we began the year with 209 corporate stores As at October 31, 2017, we are at 444 corporate stores +235 stores Growth through select acquisitions and greenfield store openings p10
Agenda Corporate Overview Industry Landscape Financial Results Strategic Priorities Value Creation Drivers Conclusion p11
Strong industry fundamentals in our 3 geographic markets United States Canada United Kingdom Addressable Market Average Age of Car Park Total Mileage Driven Light Vehicle Registration New Car Registration Sources US$2.7B market C$2.6B market 4.1B market 11.6 years (2016) This number has been flattening since 2013, was 11.5 in 2015 3.2 trillion miles (2016) Increase for 5 th straight year 263.6 million (2015) Up from 260.3 in 2014 17.5 million (2016) Up from 17.4 in 2015 US Department of Transportation Federal Highway Administration NADA and Automotive News 9.62 years (2015) 1.15% increase from 2014 16,509 km (2015) per car 5.71% increase from 2014 25.6 million (2015) 4.4% increase from 2014 1.90 million (2015) 2.63% increase from 2014 2016 Outlook Study AIA Canada Yearbook 2017 Canadian Collision Repair Industry 7.7 years (2016) 14.9% increase from 2006 325.1 Billion miles (June 2017) 1.4% increase from 2016 33.5 million (2015) 3.7% increase from 2014 2.2 million (2017 YTD) 4.6% decrease from 2016 UK Government Statistics, SMMT, OC&C, PWC. p12
Leadership position in each geographic market United States Canada United Kingdom FinishMaster ~29% Market Share of a US$2.7B market Canadian Automotive Group ~19% Market Share of a C$2.6B market The Parts Alliance ~7% Market Share of a 4.1B market Automotive Paint and Related Products Warehouse Distribution Segment for Automotive Aftermarket Parts Automotive Aftermarket Parts Acquisition opportunities in all 3 key segments! p13
The acquisition of The Parts Alliance resulted from a thorough strategic analysis 1 Look outside North America To access a new market with high consolidation potential To create a third growth pillar for Uni-Select To achieve geographic diversification and improve the business risk profile 2 Select the UK automotive aftermarket parts market as point of entry Fourth largest European market, worth 4.1 billion per year One of the most fragmented in Europe, with significant potential for consolidation Expected to see continued growth, driven mostly by growing and ageing UK car park Natural cultural fit UK 3 Target attributes Leading UK distributor, with national footprint and significant operational scale (one of only two major players) Demonstrated ability to grow organically and through acquisitions Similar core business profile with similar supply base Sales, people and technology driven culture Focused on growing business through the corporate store network and independent affiliated customers p14
150-day integration update 8 different integration task forces working in parallel, with specific objectives and plans Strong early focus on governance, performance measurement / monitoring and IT systems Negotiations already started with manufacturers to revaluate pricing and payment conditions Best practice identification and sharing has started and will continue into 2018-19 p15
Industry Landscape Recap Leadership position in each of our core markets Good fundamentals in each business Well positioned to capitalize on growth opportunities Growth through organic growth, greenfield store openings and select acquisitions Experienced management team p16
Agenda Corporate Overview Industry Landscape Financial Results Strategic Priorities Value Creation Drivers Conclusion p17
Total sales by business segment (Millions of US $) 395.8 Q3 2017 Highlights (YoY) Total sales up 24.3% to $395.8 million mainly driven by recent acquisitions and solid organic growth in Canada 318.5 116.3 291.0 110.2 297.2 97.5 340.3 55.7 130.8 133.6 FinishMaster US sales reached $206.5 million, up 2.1% mainly from business acquisitions Canadian Automotive Group sales rose by 14.8% to $133.6 million due to sales initiatives and Canadian economic conditions 202.2 180.8 199.7 209.5 206.5 Excluding the FX positive translation impact of $5.1 million, Canadian Automotive Group sales growth at 10.4% 14% Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 FinishMaster US Canadian Automotive Group The Parts Alliance UK (1) FinishMaster Canada results are reported under the Canadian Automotive Group. (1) 34% $395.8M Q3 2017 Sales Business Mix 52% p18
EBITDA (1) by business segment (Millions of US $) 30.8 32.5 (2) 7.6 25.4 (2) 23.2 33.9 (2) 11.3 10.7 5.5 2.9 26.7 21.7 23.3 24.0 24.4 2.3 Q3 2017 Highlights (YoY) Adjusted EBITDA (2) amounted to $33.9 million, up 10.0% driven mainly by The Parts Alliance and Canadian operations. Adjusted EBITDA margin (2) was down by ~ 110 bps to 8.6%, mainly in relation to the different business model at The Parts Alliance UK (August being one of their historical weakest month) EBITDA Margin (2) -3.4-1.8-3.1-2.8-3.5 9.7% 8.7% 7.8% 9.5% 8.6% Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 FinishMaster US Canadian Automotive Group The Parts Alliance UK Corporate (1) This information represents a non-ifrs financial measure. Please refer to the Non-IFRS financial measures section of the Q3 2017 report for further details (2) Q4 2016 adjusted; Q2 2017 adjusted for net transaction charges related to The Parts Alliance acquisition; Q3 adjusted for net transaction charges related to The Parts Alliance acquisition and reversal of restructuring charges p19
Earnings results (1) (Millions of US $) Earnings (1) 17.3 13.1 11.0 16.6 15.1 Q3 2017 Highlights (YoY) Adjusted earnings reached $15.1 million or $0.36 per share vs. $0.41 per share in Q3 2016. The $0.05 EPS difference is mostly related to increased intangible assets, amortization and increased finance costs related to acquisitions Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Earnings per share ($) 0.41 0.39 0.36 0.31 0.26 Q3 2017 tax blend rate of 40.9% was higher than Q3 2016 at 32.1% due to nondeductible expenses related to the acquisition costs of The Parts Alliance, partly offset by different geographic pre-tax earnings mix Transaction expenses of $2.3 million related to the Parts Alliance acquisition Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 (1) Q4 2016 adjusted; Q2 2017 adjusted for net transaction charges related to The Parts Alliance acquisition; Q3 2017 adjusted for net transaction charges related to The Parts Alliance acquisition and reversal of restructuring charges p20
500 450 400 Q3 2017 Operating results highlights (Millions of US $) Sales 395.8 318.5 % Revenue Q3 17 Q3 16 Q3 17 Q3 16 Gross margin 128.5 97.8 32.5% 30.7% Employee benefits 65.0 45.1 16.4% 14.1% Other operating expenses 29.6 21.9 7.5% 6.9% EBITDA (1) 32.2 30.8 8.1% 9.7% Net transaction charges and reversal of restructuring changes 1.7-0.5% - Adjusted EBITDA (1) 33.9 30.8 8.6% 9.7% Sales Variance - Q3 2017 +26.4% +24.3% (YoY) $395.8M Q3 2017 Highlights (YoY) Sales were up 24.3% fueled by contributions from recent business acquisitions which represents over 26.4% of the variation, with The Parts Alliance representing 17.5% Consolidated organic growth at ~2.1% excluding the impact of the product line changeover and the hurricanes at FinishMaster US Canadian Automotive Group recorded strong organic growth of 7.0% Distribution centres and corporate stores are reporting positive organic growth 350 300 250 200 $318.5M +1.6% -2.3% +15.3% -1.4% Q3 2016 Organic FX # of billing Acquisitions & Q3 2017 growth days others EBITDA (1) amounted to $32.2 million. Excluding net transaction charges related to The Parts Alliance acquisition and a reversal of restructuring charges, adjusted EBITDA (1) rose by 10.0% mainly from accretive acquisitions (1) This information represents a non-ifrs financial measure. Please refer to the Non-IFRS financial measures section of the Q3 2017 financial report for further details p21
Q3 2017 Sources and uses of funds (Millions of US $) Q3 2017 Highlights (YoY) 272.3 282.6 Operating activities totaled $49.3 million, down $2.2 million compared to Q3 2016 mainly due to the nonrecurring costs related to the acquisition of The Parts Alliance Free cash flows amounted to $35.5 million compared to $37.6 million in Q3 2016, for the same reasons mentioned above 19.8 49.3 59.4 Business acquisitions required $277.8 million and were funded by the debt Cash beginning of the period Operating activities Financing activities Investing activities Cash end of the period p22
Q3 2017 financial position (Millions of US $) Total Net Debt (1) (end of the period) 278 260 439 Q3 2017 Highlights Total Net Debt(1) outstanding was $439.0 million up $249.7 million from Q2 2017 mainly due to The Parts Alliance acquisition Funded Debt to Adjusted EBITDA (1) ratio 0 Nil (2) 112 2013 2014 2015 2016 Q3 2017 Leverage ratio of the Funded Debt to Adjusted EBITDA (1) of 3.82X at quarter end Unused credit facility at ~ $234 million 2.74 2.34 3.82 3.14 Q3 2017 pro forma of 3.14 includes The Parts Alliance LTM run-rate EBITDA 1.04 0.00 Nil (2) 2013 2014 2015 2016 Q3 2017 Q3 2017 Pro forma (1) This information represents a non-ifrs financial measure. Please refer to the Non-IFRS financial measures section of the Q3 2017 financial report for further details (2) Strong free cash flow following the sale of US automotive parts distribution business in 2015 p23
Q3 2017 YTD Operating results highlights (Millions of US $) Sales 1,033.3 906.3 Sales Variance - Q3 YTD 17 $906.3M +0.3% +14.0% (YoY) +17.9% $1033.3M % Revenue YTD 17 YTD 16 YTD 17 YTD 16 Gross margin 325.1 274.0 31.5% 30.2% Employee benefits 161.2 130.6 15.6% 14.4% Other operating expenses 74.3 61.0 7.2% 6.7% EBITDA (1) 84.9 82.3 8.2% 9.1% Net transaction charges and reversal of restructuring charges 4.6-0.5% - Adjusted EBITDA (1) 89.5 82.3 8.7% 9.1% Q3 2017 YTD Highlights (YoY) Sales were up 14.0% due mainly to business acquisitions up 17.9% partly offset by negative organic growth Adjusted EBITDA is up 8.8% During Q3 2017 YTD, Uni-Select acquired 9 businesses, opened 4 greenfield stores and integrated 12 locations -3.6% -0.6% YTD 2016 Organic growth FX # of billing days Acquisitions & others YTD 2017 (1) This information represents a non-ifrs financial measure. Please refer to the Non-IFRS financial measures section of the Q3 2017 financial report for further details p24
Uni-Select Inc. 12-month period pro forma (1) selected financial information (Millions of US $) Uni-Select Inc. Dec. 31, 2016 The Parts Alliance March 31, 2017 Adjustments Pro forma (US$) (US$) ( ) (US$) (US$) Sales 1,197.3 346.4 265.9-1,543.7 EBITDA (2) 106.8 21.4 16.4 (0.7) 127.5 EBITDA margin 8.9% 6.2% 6.2% - 8.3% EPS 1.37 (0.13) 0.22 1.46 (1) As presented in the Business Acquisition Report ( BAR ) filed on sedar.com on October 20, 2017 (2) This information represents a non-ifrs financial measure. Please refer to the Non-IFRS financial measures section of the 2016 Annual Report for further details p25
Financial Results Recap Sound cash flow from operating activities, excluding non recurring expenses Adjusted EBITDA margin for Q3 at 8.1% Adjusted earnings amounted to $15.1 million or 36 cents per share in Q3 Expect leverage to decrease over time p26
Agenda Corporate Overview Industry Landscape Financial Results Strategic Priorities Value Creation Drivers Conclusion p27
3 corporate strategic priorities Strategic Priorities Initiatives 1 Drive profitable growth short and long-term revenue growth Organic sales growth in all 3 businesses Selective acquisitions All 3 segments 2 Strengthen our talent base Further deploy development programs to all team members Build bench strength 3 Improve operating efficiency Improve productivity of all our operations Continue integrating our acquisitions Utilize technology to drive efficiency and customer service Implement the 20/20 initiative p28
FinishMaster US Strategic priorities 1 2 3 4 Strategic Priorities Drive base organic sales growth and select expansion initiatives Enhance our offer Drive business model improvements Strengthen our talent base Initiatives Sales initiatives to increase new customer acquisitions and current customer retention Improve FinishMaster geographical coverage through greenfields or acquisitions Continue to deploy our private label SMART brand Expand presence in industrial paint products across existing channels Productivity initiatives for operations and support functions Development of improved cost-to-serve models for customer segments Further deploy development programs to all team members Build bench strength p29
Canada strategic priorities 1 Strategic Priorities Grow our automotive parts business Initiatives Bumper to Bumper corporate store expansion Bumper to Bumper brand to more independent customers 2 Grow our Paint, Body & Equipment business FinishMaster corporate store expansion 3 Continue to refine and extend our product offer Product offer and improvement initiatives Global Program Group Affiliations (Nexus) 4 5 Improve operating efficiency Strengthen our talent base Continue implementation of PartsWatch POS system and route optimization system Productivity improvements for all segments Further deploy development programs to all team members Build bench strength p30
UK Strategic priorities Strategic Priorities Initiatives 1 Drive base organic growth and network expansion initiatives Selective acquisitions Open new greenfield locations to expand geographic coverage Add independent motor factor customers to the network 2 Integration of IT systems and performance Business optimization management systems Productivity improvements in store operations 3 Product synergies UK & Canadian supplier opportunities Strengthen our talent base 4 Further deploy development programs to all team members Build bench strength p31
Agenda Corporate Overview Industry Landscape Financial Results Strategic Priorities Value Creation Drivers Conclusion p32
Six drivers of value creation #6 Capital Structure #1 Base Organic Growth #5 Capital Allocation Value Creation Create & Protect #2 Greenfield Branch Opening #4 Cost Discipline #3 Selective Acquisitions p33
Driver #1: Base organic growth Customer Service Driven Store Network Development High Fill Rates Building our Brands Base Organic Growth Technology IT (PartsWatch Allicat) Private Label Product expansion Execution Excellence Continuous Improvement p34
Driver #1: 2018 organic growth outlook United States Canada United Kingdom GDP Forecast: 2.2% Our Goal: 3-4% GDP Forecast: 2.3% Our Goal: 2.5-3.5% GDP Forecast: 1.5% Our Goal: 3-4% Source: Bloomberg as at October 24, 2017 Weighted average based on a list of 30-70 bank forecasts. Greater weight is applied to more recent forecasts p35
Driver #2: Organic Greenfield branch openings in US and UK Implement Standard Operating Model Efficient and Cost Effective Construction of New Stores Greenfield Branch Openings Relentless Customer Focus Market Analysis Execution Excellence Continuous Improvement Process p36
Strategy Driver #3: Selective Acquisitions Business Units Responsible for Integrations & Synergies Build Market Density Expand Geographic Coverage Selective Acquisitions Targets identified by the Business units M&A Centralized Decision on Capital Allocation Centralized valuation & pricing Implementation p37
Driver #4: Cost discipline Productivity Payroll as a % of GM Improvement Leveraging Systems and Processes Optimize and implement Cost-to-serve model Cost Discipline Uni-Select 20/20 initiative Save $20M in operating costs by the end of 2020 So far, approximately 50% of the total targeted costs savings have been identified ~25% of the total costs savings are expected to be implemented by the 1 st Quarter of 2018 (mainly in UK segment) Another ~20% is expected by the end of 2018 (mainly in North America) The balance of the expected savings in 2019 and 2020 (across the 3 businesses) We would expect ~2/3 of the savings from productivity improvements and ~1/3 from operating costs Disciplined Culture Economies of Scale p38
Driver #5: Capital allocation Maintenance CAPEX Working Capital Dividends Capital Allocation Greenfield Growth CAPEX Acquisitions p39
Driver #6: Capital structure Adjusted (1) Leverage Ratio 3.14:1* Pro Forma Average Costs of Debt 3.3%* $439M* of Net Debt (1) Capital Structure Free Cash Flow (1) $35.5M** $234M* Available Under Credit Facilities Disposal of Non-Core Assets (1) This information represents a non-ifrs financial measure. Please refer to the Non-IFRS financial measures section of the Q3 2017 financial report for further details *As at September 30, 2017 **Generated during the 3 rd quarter of 2017 p40
We expect to bring our leverage below 2.5X Total Net Debt to EBITDA over the next 24-36 months 500 450 400 Total Net Debt Funded Debt to Adjusted EBITDA Ratio 3.50x 3.00x 350 2.50x 300 2.00x 250 200 1.50x 150 1.00x 100 50 0.50x - FY14Q4 FY15Q1 FY15Q2 FY15Q3 FY15Q4 FY16Q1 FY16Q2 FY16Q3 FY16Q4 FY17Q1 FY17Q2 FY17Q3 0.00x 2015 2016 2017 Quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 # of stores acquired pre-integration 8 2 10 16 26 20 0 15 20 1 173 p41
Driver #6: Capital structure & financial flexibility Credit Facilities Total Net Debt (1) TERM FACILITY 439.0 A new US$100 million financing executed to support the Parts Alliance acquisition Maturity: June 2020 260 298 REVOLVING CREDIT FACILITIES Increased fund availability by $125 million (Total of $525 million) Maturity: extended from 2020 to July 2021 - - - 80 166 134 112 199 189 (1) This information represents a non-ifrs financial measure. Please refer to the Non-IFRS financial measures section of the Q3 2017 financial report for further details Uni-Select intends to refinance a portion of its long-term debt over the next 24 months p42
Driver #6: Strong adjusted EBITDA (1) to Free Cash Flow (FCF) (1) conversion Over the last 5 years, Uni-Select EBITDA (1) conversion rate to FCF (1) has averaged 80% Uni-Select objective is to have a conversion rate ranging between 75% and 85% 120 120% 100 102% 100% 92% 80 72% 75% 81% 80% 60 60% 60% 40 40% 20 20% 0 FY12 FY13 FY14 FY15 FY16 YTD FY17 0% LTM Adjusted EBITDA Free Cash Flow FCF Conversion ratio (1) This information represents a non-ifrs financial measure. Please refer to the Non-IFRS financial measures section of the Q3 2017 financial report for further details p43
Result of the value creation equation Increased dividend per share and return on equity growth DIVIDEND PER SHARE ($C) ADJUSTED RETURN ON AVERAGE TOTAL EQUITY (1) 0.26 0.26 0.29 0.315 0.335 8.7% 9.8% 10.9% 12.0% 12.9% FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 (1) This information represents a non-ifrs financial measure. Please refer to the Non-IFRS financial measures section of the Q3 2017 financial report for further details Uni-Select expects to maintain its historical practice on dividends p44
Agenda Corporate Overview Industry Landscape Financial Results Strategic Priorities Value Creation Drivers Conclusion p45
In summary Leadership position in our 3 key markets Well positioned for growth Strong industry fundamentals Productivity improvement in all 3 segments Good financial flexibility for the future Strengthening our talent base across the organization We have the best team in the business! p46