Accelerating Profitable Growth Uni-Select TSX: UNS Q3 2016 Conference Call October 27, 2016
FORWARD-LOOKING INFORMATION 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 forwardlooking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws. 2-for-1 stock split of common shares was effected on May 11, 2016 for shareholders of record as at May 6, 2016 to increase the number of shares outstanding and enhance affordability to investors. To reflect the effect of the stock split, information pertaining to the number of common shares has been retroactively restated. p2
Q3 2016 - Financial Highlights (YoY) Total Sales reached $318.5 million, up 15.3% EBITDA (1) increased by 18.9% to $30.8 million EBITDA margin (1) reached 9.7% Net Earnings rose to $17.3 million or $0.41 per share, up 10.8% from last year Quarterly dividend of C$0.085 per share NCIB renewal of 2 million shares in August 2016 (1) Non-IFRS measure p3
Current Initiatives FinishMaster USA very solid quarter Successfully integrating acquisitions capturing synergies One paint supplier line changeover underway Organic growth excluding the changeover: +3.5% in the third quarter Strong acquisition pipeline Automotive Canada Economic headwinds / building a foundation Economic headwinds in various regions affecting some members Launched FinishMaster Canada converting 3 stores in Ontario (plus one acquired post Q3) Bumper to Bumper store brand conversion independent and corporate progressing very well Good progress on corporate store integration processes and systems Corporate store organic sales are positive for the quarter and YTD Strong acquisition pipeline p4
Q3 2016 - Total Sales by Business Segment In millions of US dollars 350 300 276.2 250 200 162.0 259.2 264.0 153.6 173.4 323.8 318.5 196.5 202.2 Q3 2016 HIGHLIGHTS (YoY) Total Sales up 15.3% to $318.5 million Paint and Related Products segment sales reached $202.2 million up 24.8% due to acquisitions as well as net customer recruitment and existing customer growth 150 100 Canadian Automotive rose to $116.3 million increasing 1.9% mainly from business acquisitions 50 0 114.2 127.3 105.7 116.3 90.6 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Business Mix Total Sales Q3 2016 vs (Q3 2015) Automotive Products (1) Paint and Related Products 63% 37% (41%) (59%) (1) FinishMaster Canada results are reported under Automotive Products. p5
Q3 2016 - EBITDA (1) by Business Segment In millions of US dollars 35 30 25 20 15 10 5 0-5 26.0 21.7 20.0 30.8 29.7 7.6 8.9 9.1 4.6 7.1 26.7 24.3 20.8 18.4 16.4-1.5-3.7-3.5-3.4-3.4 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Paint and Related Products Automotive Products Corporate YTD & Q3 2016 HIGHLIGHTS (YoY) Q3 EBITDA (1) was up 18.4% due to higher contribution from the Paint and Related Products segment Q3 EBITDA margin (1) increased by 30 bps due to accretive business acquisitions and improved buying conditions YTD EBITDA (1) of $82.3 million; EBITDA margin (1) at 9.1% 9.4% EBITDA Margin (1) 7.7% 8.2% 9.2% 9.7% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 (1) Adjusted EBITDA in 2015 (non-ifrs measure, excluding non-recurring items). Adjustments include restructuring and other charges, impairment and transaction charges related to net assets sales and costs related to network optimization or store disposal or closure. p6
Q3 2016 Net Earnings & EPS (1) +9.3% (YoY) +10.8% (YoY) In millions of US dollars Net Earnings (1) In US dollars Earnings per Share (1)(2) 18 16 15.8 16.8 17.3 0.40 0.37 0.40 0.41 14 12 11.0 11.5 0.30 0.26 0.27 10 8 0.20 6 4 0.10 2 0 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 0.00 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 (1) Adjusted Earnings and EPS in 2015 (non-ifrs measure, excluding non-recurring items). Adjustments include restructuring and other charges, impairment and transaction charges related to net assets sales and costs related to network optimization or store disposal or closure, net of taxes. (2) Reflect the effect of a 2-for-1 stock split of common shares on May 11, 2016. p7
YTD 2016 - Operating Results Highlights In millions of US dollars % Revenue % Revenue In millions of US dollars Q3 16 Q3 15 Q3 16 Q3 15 9M 16 9M 15 9M 16 9M 15 Sales 318.5 276.2 906.3 1,096.2 Sales from net assets sold - - - (299.3) Gross Margin 97.8 78.5 30.7% 28.4% 274.0 325.1 30.2% 29.7% Employee Benefits 45.1 38.7 14.1% 14.0% 130.6 171.4 14.4% 15.6% Other Operating Expenses 21.9 13.8 6.9% 5.0% 61.0 80.0 6.7% 7.3% EBITDA (1) 30.8 26.0 9.7% 9.4% 82.3 76.6 9.1% 7.0% 360 340 320 300 280 260 240 220 Sales Variance - Q3 16 Organic growth FX Net assets sold +15.3% (YoY) Sales Variance - 9M 16 +17.3% (YoY) Acquisitions & others 318.5 276.2 +0.1% +17.6% +14.8% 840 796.9 (2) +0.5% +0.6% -1.3% -1.1% 790-1.7% -0.5% 740 Q3 2015 Q3 2016 9M 2015 9M 2016 990 940 890 Organic growth FX # of billing days Net assets sold Acquisitions & others 906.3 (1) Adjusted EBITDA in 2015 (non-ifrs measure, excluding non-recurring items). Adjustments include restructuring and other charges, impairment and transaction charges related to net assets sales and costs related to network optimization or store disposal or closure. (2) Excludes Sales from net assets sold. p8
Q3 2016 Sources and uses of funds (vs. Q3 2015) In millions of US dollars 89 79 Operating activities Financing activities Business acquisitions Other Investments Q3 2016 HIGHLIGHTS (YoY) 69 59 49 39 29 19 +12.4 (+78.5) +51.5 (+ 16.6) -30.2 (-11.2) -3.2 (-20.6) -9.5 (-8.4) +21.0 (+49.9) Free cash flow increased by $15.2 million or 67.9% compared to last year Operating Activities totaled $51.5 million, a $34.9 million improvement compared to Q3 2015 Financing activities mainly related to reimbursement of the credit facility Fewer closing of business acquisitions during the quarter 9-1 Cash Beginning of the period Cash end of the period p9
Leverage Profile as of September 30, 2016 STRONG FINANCIAL POSITION 3.5 3 2.81 3.25 3.24 2.74 Lowest leverage ratio since 2010 at 1.31X in Q3 2016 2.5 2 2.34 1.64 Strong free cash flow following the sale of US automotive parts distribution business in 2015 1.5 1.31 1 Over $260 million available from the credit facilities 0.5 0 2010 2011 2012 2013 2014 2015 2016 YTD Funded debt to EBITDA (1) ratio (1) Adjusted EBITDA in 2015 (non-ifrs measure, excluding non-recurring items). Adjustments include restructuring and other charges, impairment and transaction charges related to net assets sales and costs related to network optimization or store disposal or closure. p10
Q3 2016 Summary & Guidance Solid revenue and EBITDA (1) growth driven by accretive business acquisitions EBITDA margin (1) reached 9.7%, a 30 basis point improvement from last year comparable EBITDA Net Earnings rose to $17.3 million or $0.41 per share, up 10.8% from last year Quarterly dividend payment of C$0.085 per share NCIB renewal of 2 million shares in August 2016 2016 Guidance Total Sales EBITDA Margin (1) US/Can Exchange Rate US$1.19 to US$1.21 billions 8.5% to 9.25% 0.76 No guidance in 2017 (1) Adjusted EBITDA in 2015 (non-ifrs measure, excluding non-recurring items). Adjustments include restructuring and other charges, impairment and transaction charges related to net assets sales and costs related to network optimization or store disposal or closure. p11
Outlook FinishMaster USA Focus on continued profitable growth through organic growth and select accretive acquisitions Integrate and capture synergies Automotive Canada Profitable growth with both independent customers and corporate stores. Build the foundation to integrate corporate stores and capture synergies Acquire select businesses to expand both Bumper to Bumper and FinishMaster Canada Consolidated Results Uni-Select Total Sales Growth (2016 Target): 13-15% (1) (1) Excluding sales from net assets sold. p12
Contact info: Investorrelations@uniselect.com p13