boyd group 2011 q4 presentation
TRANSCRIPT
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April 2012
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Forward-Lookin Statement
This presentat ion contains forward-looking st at ements, other t han hist orical fact s, which ref lect t he
view of the Fund's management with respect to future events. Such forward-looking statements
ref lect the cur rent views of the Fund's management and are made on the basis of informat ion
current ly available. Alt hough management believes t hat it s expectat ions are reasonable, it can give
no assurance that such expectat ions wi l l prove to be correct . The forward-lookin statement
cont ained herein are subject t o t hese fact ors and other risks, uncert ainties and assumpt ions relat ingto the operat ions, results of operat ions and f inancial posit ion of the Fund. For more informat ion
concerning forward-lookin statements and relat ed risk fact ors and uncert aint ies, please refer t o the
Boyd Groups interim and annual regulatory f il ings.
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Ca ital Market Prof ile
.
Units and Shares Outstanding: 12.9 mil l ionPrice (Apri l 2, 2012): $11.95
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Market Capitalizat ion: $154.2 million
Annualized Dist r ibut ion (per unit ): $0.45
Current Yield: 3.8%
Payout Rat io (2011): 31.3%
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Com an Overview
Own and operate collision repair centres in the U.S. and Canada
Largest operator of collision repair shops in North America
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Coll ision repair companies that derive a high percentage of their revenue from
insurance companies are the most insulated from the effects of the economy
of any segment of the auto aftermarket industry
Revenue Contribution:
By Country By Payor
< 10%Customer Pay
U.S.
Canada
> 90%Insurance
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North American Presence
Canada Manitoba 14
39 Alberta (12)
B.C. (11)
Saskatchewan (2)
U.S. Il l inois (36)
North Carolina (17)
140centers
Arizona (12) Georgia (12)
Washington (12)
o 9
Indiana (8)
Florida (9)
Colorado (6)
Pennsylvania (5)
Nevada 3
5
Oklahoma (3)
Kansas (1)
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. .
140 locat ions includin 8 from recent l
acquired Master Collision Repair, 37 from
True2Form, and 28 from Cars Collision
Operate full -service repair centres offering
collision repair, glass repair and
re lacement services
Strong relationships with insurance carriers
as a result of best -in-class performance
Advanced management system technology
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39 Company-owned/ operated centres;
8 franchise locat ions
Operate full -service repair centres offeringco s on repa r, g ass repa r an rep acemen
Customer focused:
Modern retail locations ISO 9002 certified
Standard operating procedures
MIS Systems
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Business Strategy
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Lar e Fra mented Market
industry is est imated to be approximately $30-40
billion annually
Car dealerships are now estimated to have
approximately 21%of the total market
Large Mult i-shop operators are estimated to haveapproximately 11%of the total market (including
car dealerships)
The remaining North American collision repair
industry is dominated by smaller independentam y-owne us nesses opera ng n oca mar e s
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Im ortance of Direct Re air Pro rams
Direct Repair Programs (DRPs) are established between insurance companies and
coll ision re air sho s to bet ter mana e auto re air claims and the level of customer
satisfaction
Auto insurers utilize DRPs for a growing percentage of collision repair claims volume
Growing preference among insurers for DRP arrangements with multi-location collision
repair operators
,
insurers and most regional insurers
Boyd has minimal exposure to one insurance customer
Top 5 largest customers cont ribute ~41%of revenue
Largest customer cont ributes 14%of revenue
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Business Strate
Same-store sales
Expensemanagement
growth and opt imizereturns from exist ing
operations
perat onaexcellenceNew locat ion and
acquisit ion growth
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single-locat ion acquisit ions
Large, accretive acquisitions at
at t ract ive mult iples
Same-store sales growth
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New Start-U
Growth t hrough Greenfield & Brownfieldeve opmen o co s on ac es
Low-cost growth No dilution
yp ca ew ar - p un ng o e :
Funded By: Forgivable Funding* US$100,000
ap a eases ,
Seller Financing US$200,000
Total Capital Investment** US$500,000
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* From Trading Part ners
** Cash/ operat ing l ine borr owings t o be used to off set any short fall in any funding source
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U.S. Colli sion Re air Market
Estimated market size in 2010 of 37,700 total collision repair locations
Long-Term Decline of Independent and Dealership Repair Facilities
Total number of collision repair locations has declined by 16%from 2006 to 2010, and
53%over the past 30 years
arge u t p e- ocat on o s on epa r perator ar et are ppor tun ty
Large MLOs represented 2.9%of total locations in 2010 and 10.8%of revenue (up
from 9.1% in 2006)
56 MLOs had $20-million or greater revenues in 2010 (Boyd acquired two in the lasttwo years)
MLOs benefit from standardized processes, integration of technology platforms, andexpense reduction through large-scale supply chain management
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Source: The Romans Group LLC, A Profile of the Evolving Collision Repair Marketplace
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True2Form Acquisition
ugust 1Strategic Benefi t s
Added 37 locations in four new eastern U.S. states
Complements existing Boyd U.S. footprint
Strong management, operational expertise
Boyd became the largest operator in North America, with 136 locat ions af ter
acquisition
Financial Benefit s
Immediately accret ive to EBITDA, Dist ributable Cash, and Value to Unitholders
US$16.8-mm transaction (net purchase price excluding costs) with no dilution tocurrent n t o ers; un e w t 9-mm new ong-term e t , 1.8-mm cas ,
and US$6-mm forgivable supplier funding
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Cars Collision Acquisition
une 11Strategic Benefi t s
Added 28 locations for a total of 164 locations post-
acquisition
ncrease oca ons o rom n e
Chicagoland market (IL and northern IN)
New Colorado market with 6 locations
Similar business model and long-term vision asBoyd Group
Financial Benefits
Immediately accret ive to EBITDA, Dist ributable Cash, and Value to Unit holders
US$20.5-mm transact ion, with no dilut ion to Unit holders; funded wit h US$9.7-
mm new long-term debt, US$5.0-mm cash, and US$5.8-mm forgivable supplier
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Master Collision Acquisition
anuary 1Strategic Benefi ts
First entry into the Florida market with the addition
of 8 new locations
omp emen ary us ness mo e prov ng a
similar fully-integrated service offering
Financial Benefit s
Immediately accret ive to EBITDA, Dist ributable Cash, and Value to Unitholders
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current Unitholders; funded with US$3.1-mm cash, and US$2-mm forgivable supplier
funding, and $7-mm new long term debt
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Review
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Revenue Growth
(C$ mi llions)
$357.0
$350.0
$400.0
$224.9
$256.8
$250.0
$300.0
$183.6
$197.6.
$150.0
$200.0
$100.0
$
.
2006 2007 2008 2009 2010 2011
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O timizin Returns f rom Exist in O s
Same-st ore sales increases in 21 of 28 most recent quart ers
ow
th12.0%
14.0%
eSalesGr
6.0%
8.0%
.
ame-Stor
0.0%
2.0%
4.0%
4.0%
2.0%
05
05
05
05
06
06
06
06
07
07
07
07
08
08
08
08
09
09
09
09
10
10
10
10
11
11
11
11
8.0%
.
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* Total Company, excluding FX. Adjust ing for t he posit ive impact of hail in Q4-10,Q4-11 SSSG was 4.7%.
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Ex ense Mana ement
Well-managed operating expenses as a percentage of sales
40.5%
40.5%
41.0%
nsesas%
s
39.5%39.5%
40.0%
atingEx
p
ofSale 39.1%
38.4%38.5%
39.0%
Oper
37.9%37.8%
38.0% 38.0%
37.5%
38.0%
37.0%
2004 2005 2006 2007 2008 2009 2010 2011
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New Location Results
New Locat ions LTM Sales (C$)* LTMEBITDA (C$)* EBITDA Margin (% )2006Tacoma, WA Renton, WA
$10,058,000 $1,422,000 14.1%co s a e,
2007Glenview, IL Tempe, AZ
$8,883,000 $1,533,000 17.3%
2008acey, a gary,
Las Vegas, NV
, , , .
2009Scurf ield, MB Anthem, AZMesa, AZ Rome, GA
$13,398,000 $757,000 5.7%
Glendale, AZ Tucson, AZ (4 locations)
2010***Cartersvil le, GA Tulsa, OKLas Vegas, NV Evanston, ILRoswell, GA Buckhead, GA
$11,142,000 $439,000 3.9%
Bellingham, WA Yuma, AZ
2011 1st Half ***Savannah, GA** McDonough, GA**
$4,785,000 $175,000 3.7%
2011 2nd Half
Richmond, BC** Seat t le, WA**
Edmonton N, AB ** Everet t , WA**
Grove City, OH** Winnipeg, MB****
Kent , WA****
$6,865,00 $(435,000) (6.3)%
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Combined $63,154,000 $4,677,000 7.4%
Average per store $1,974,000 $146,000 7.4%
* Based on last twelve months (LTM ) resul ts *** Excludes resul ts for True2Form and Cars as these were strategic acquisi t ions outside the scope of t his growth plan
** Annuali zed based on actual r esult s excludi ng the start up period ****Excludes the result s of t hese locat ions as t hey were added at t he end of t he report ing period
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Financial Summar
(in C$ millions, except per unit and%amount s )
Three-months ended Twelve-months endedDec. 31, Dec. 31, Dec. 31, Dec. 30,
Sales $100.5 $80.8 $357.0 $257.0
Gross Margin $45.1 $36.4 $160.1 $116.4
Adjusted EBITDA* $7.6 $7.0 $24.4 $18.8
Adjusted EBITDA Margin* 7.6% 8.7% 6.8% 7.3%
Fair Value Adjustments (1.5) (1.8) (2.8) (2.5)
Income Tax Expense $0.7 ($6.7) $2.5 ($6.6)
Net Earnings ($2.1) $7.9 $2.9 $13.5
Net Earnings Per Unit (di luted) ($0.188) $0.800 $0.262 $1.249
Adj usted Net Earnings* $4.5 $4.9 $14.2 $11.9Distributable Cash $4.7 $4.1 $16.0 $15.1
Distributable Cash Per Unit (diluted)
& Class A Common Share$0.363 $0.343 $1.368 $1.275
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Payout Ratio 29.6% 24.5% 31.3% 24.7%
*Adj usted EBITDA and Adjust ed Net Earnings are not calculat ions defined under IFRS. See the Companys Q4 2011 MD&A for more informat ion
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Balance Sheet
(in C$ millions) Dec 31, 2011 Dec 31, 2010
Cash $18.4 $9.6
Long-Term Debt $28.9 $20.8
Obligations Under Finance Leases $6.4 $4.6
Operating Line $nil $0.2
(total debt, including current port ion and bankindebt edness, net of cash)
$16.9 $16.0
. .
Net Debt / Adj usted EBITDA (t tm) 0.69x 0.85x
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Net Debt / Adj usted EBITDA
(pro forma for Cars acquisition)0.65x N/A
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Dist r ibut ion Increases
Annuali zed dist r ibut ions have increased b 150 since December 2007
Annualized Dist r ibut ion per Unit (C$)
0.330 $0.345$0.360
$0.420
$0.450
$0.40
$0.45
$0.50
$0.180 $0.195$0.210 $0.225
$0.240 $0.255 $0.270$0.285 $0.300
.
$0.20
$0.25$0.30
.
$0.00
$0.05
$0.10
$0.15
Dec07
Mar08
Apr08
May08
Jun08
Aug08
Sept08
Nov08
Dec08
Mar09
Apr09
May09
Jun09
Aug09
Sept09
Nov09
Dec09
Mar10
Apr10
May10
Jun10
Aug10
Sept10
Nov10
Dec10 Jan11
Oct11
Nov11
Present
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Tax Eff icient Trust St ructure
Boyd Group Income FundBoyd Group Income Fund
The Bo d GrouThe Bo d Grou
Canada
Inc.Inc.
Canadian OperationsCanadian Operations
U.S. to fund distributions
& Operating Entities& Operating Entities
. .
(U.S.) Inc.(U.S.) Inc.
U.S. O erationsU.S. O erations
& Operating Entities& Operating Entities
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6-10%growth in new collision repair locations per year
Increase Nort h American presence through:
Targeted start -ups and/ or acquisit ions in exist ing and adjacent
markets
Drive same-store sales growth through enhanced capacity
ut ilizat ion develo ment of DRP arran ements and levera in exist in
maj or and regional insurance relat ionships
Continue to look for accelerated growth opportunities through the
acquisit ion of mult i-locat ion collision repair businesses
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Experienced & Commit tedanagemen eam
Brock Bulbuck President & Chief Execut ive Of f icer
Dan Dott Chief Financial Officer
Tim O DaPresident & Chief Operat ing Of f icer
. . perat ons
,
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Summar
Strengthening balance sheet
Stability Insurer preference for professional,mult i-unit operators
+
Increasin cash dist ribut ionsas s r u ons
Low payout ratio
Growth
$40-billion fragmented industry
Hi h ROI rowth st rate
= A Strong Foundation for Future Growth
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