Q4 2020 Uni-Select Inc Earnings Call
Good morning, My name is Joanne and I'll be your conference operator today at this time, all participants I would like to welcome everyone to Uni Select Inc of 2024th quarter results year end results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question.
And the answer session if you would.
The ask a question during this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press. The turnkey. Please be advised that today's conference is being recorded. Thank you Mr. Louis Juneau, Chief Legal Officer, Inc.
The charity you may begin your conference.
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Good morning, everyone and thank you for joining us for the Uni Select Inc. Fourth quarter call Conference call. Presenting this morning are Brent Windom, President and CEO of do you need to let Ken President and CEO of the Canadian Automotive group.
And if it can be CR executive.
Vice President and Chief Financial Officer.
Following their comments, we will open the call for questions.
Please note that all documents referred to in today's conference call, including this webcast presentation can be found on our website at <unk> Dot Com Inc.
The investors.
But.
As noted on slide two I would like to remind you about the caution regarding forward looking statements.
Which is applied to our presentation and comments.
All amounts are expressed in U S dollars, except as otherwise pits of fine.
With that let me turn the call over.
Two Brent.
Thank you Lori and good morning, everyone and thank you for joining us.
Before we begin I would like to recognize the efforts of the units like the.
Of over 4800 team members for their continued commitment to drive sustainable improvements for our customers and for our shareholders during the circumstances due to the pandemic.
The SEC today, we will discuss the Q4 results of some key highlights from 2020, let's turn to page for please.
As you can observe on the industry graphs. There was a significant deal in Q2 at the start of the pandemic and the initial lockdowns.
The substantial recovery in Q3 of the confinement measures were lifted.
And.
That's the pronounced the up in Q4 as the second wave of the pandemic hit.
The sales of the three businesses were highly correlated to the respective markets throughout the year.
With the auto parts of aftermarket recovering much fashion in the French market.
Let's turn to page seven please for the fourth quarter.
Consolidated sales for the fourth quarter were down.
Now, 11% of $366 million from 413 million last year, primarily attributable to the slow recovery of as expected at finish matching and to a lesser extent of tpa due to the new governmental lockdown measures put in place as a result of the second wave of the COVID-19. These.
These factors were partially offset.
Set by the continued improvement of tags performance, which reported increased sales versus last year.
Organic growth continued its sequential improvement from the trough set in the second quarter and ended slightly better than Q3 at a negative 12% or an impact of $49 million.
In turn the adjusted EBITDA decreased.
The 24 million compared to $28 million or a margin of six 5% from a margin of $6 eight last year.
The impact from the pandemic was partially offset by the savings realized from the CIP and cost control measures.
While our consolidated sales of not returned to normalized levels, we manage our adjusted.
Even the EBITDA margin in line the last year at six 5% of <unk>.
Testament to the successful execution of our business continuity plans and our continuous productivity improvement initiatives.
Let's turn to page eight and review the central National Police.
It finished masher as stated we continued to face of slower recovery than the other segments of the.
Part of it.
Demand continues to improve but remains well under 2019 levels sales.
Sales were down 22% to 155 million organic growth continued its sequential improvement for the second quarter and ended the Q4 better than Q3 with an impact of 44 million for.
Of our sales are down.
We're maintaining our market share ourselves or in line with the markets in which we operate and mirrors the trend of the third quarter.
In the quarter, we integrated one store having completed the heavy lifting earlier this year.
In 2020, we integrated a total of 33 company owned stores ending the year with 147 stores.
With minimum impact.
Now don't ourselves or our customer service levels adjusted.
Adjusted EBITDA decreased by 50% to eight 4 million for a margin of five 4% versus the same period last year. What is important to highlight is the although our Q4 is seasonally weaker we succeeded and generate a higher adjusted the EBITDA in Q3.
Impact and test some of it our actions are beginning to bear fruit.
The increase was primarily due to the lower market demand, resulting in lower fixed cost absorption.
More.
Excuse me lower rebates from the optimization of inventory.
As well as the resolving customer mix as national accounts in humans, so continue to gain.
Three of Baird.
These factors were partially compensated by the savings from our CIP.
If you'll join me on page nine please for the Canadian Automotive group.
CAG continue continued to perform well under the context with sales increasing 2% in the quarter. Despite the impact of the pandemic in a slow market recovery for SPV EBIT segment.
Gained share.
Sales reached 125 million of from 122 million last year, driven by acquisitions and the appreciation of the Canadian currency.
Organic growth was flat and in line with the Q3.
It is important to note that the sales returned to 2019 levels in the second half of 'twenty two of them. Despite the.
Back of the pandemic, demonstrating the resiliency of our business model.
In the quarter, we acquired two stores in the strategic market in 2020, we integrated for company owned stores acquired five stores ending the year with 76 stores in our network.
We also migrated 17 stores to our single point of yourself.
Cell system, which will lead the southern increasing the efficiency.
Adjusted EBITDA reached $13 4 million for a margin of 10, 7% compared to $9 2 million and of margin of seven 6% same period last year. The significant improvement was driven by the savings from the productivity improvements.
And the CIP and to a lesser extent the favorable.
Timing of vendor rebates and the favorable variance in foreign exchange cash.
<unk> ended the year with an adjusted EBITDA of $48 million or a margin of nine 9% higher than $47 million or a margin of nine 1% last year our teams ability.
<unk> and dedication to manage the business continues to grow and as shown in the sustained improvements in our profitability.
Turning to page 10, please for the parts of lines.
Tpa had a softer Q4 than expected as government imposed lockdown measures were put in place in October although we remained open and the like Downs. This one of the second one in the U.
U K we.
We saw some decline in the improved run rate from the third quarter, but certainly not to the extent of experienced in April sales reached $87 million compared to 92 million last year, representing an organic growth of negative 6% in line with the third quarter the.
The sales variance was mainly due to the impact of from the confinement.
The measures as well as the erosion, resulting from the integration of company owned stores and these factors were partially offset by the appreciation of the British pound.
In 2020, we integrated eight company owned stores ending the year with 171 stores in the network. We're very proud of the team's accomplishments have successfully migrated.
<unk> 36 stores of our single point itself system as well adjusted.
Adjusted EBITDA reached $6 7 million or margin of seven 8%, representing the best Q4 margin the date for Tpa.
From $5 7 million or margin of five 7% last year.
These results were driven by savings from the <unk>.
Productivity initiatives from the CIP until the lesser extent the governmental occupancy subsidies.
Excluding the government subsidies of 1 million the adjusted EBIT would still have been better than last year at $5 $7 million or a margin of six 6%.
In the second half of the year of the adjusted EBITDA in absolute dollars of margin were higher than the.
The same quarters in 2020, despite the impact of the pandemic.
Tpa ended the year with six 1% adjusted EBITDA margin higher than five 6% last year. We believe this profitability of sustainable and will further improve over time.
Please turn to me are with me to page 11 for the 20.
2020 highlights.
2020 was a challenging year, but we produced better than expected results when compared to our expectation at the start of the pandemic a testament to the resiliency of the business model and our quick and efficient actions to adjust our operations for the new market realities consolidated sales for the year decreased.
The 15% the decrease in each of our business segments, we are directly correlated with the respective market. Therefore, our market share was maintained all around.
Well the pandemic negatively impacted our business. It helps us identify further opportunities to accelerate our transformation during the year, we realized more than 30 million of annualized.
The savings.
While CAG and Tpa of completed the heavy lifting in regards to the plan the remains of initiatives.
And opportunities for further improvements of finished mastering.
In 2020, we integrated 45 stores and acquired five stores and in the year with 394 stores in the network or.
Our adjusted EBITDA.
Decreased to 30% to 32% to 89 million versus 130 million last year.
However, our adjusted EBITDA margin only decreased seven point from seven 5% to 6%.
As the successful implementation of our cost control measures.
And the and the benefits from our past investments mitigate.
Mitigated the impact on our profitability.
I would like to now turn the call over to Eric.
Our financial review Eric.
Thank you Brad and good morning, everyone turning to our financial position on page 13.
As of December 31, 2020 crowd, sending total net debt stood at $270 million, including 101.
And of all of your first lease obligation, representing a decrease of $79 million versus the $449 million and the $101 million respectively. At the end of 2019.
We were able to reduce our debt in a challenging operating environment largely due to the successful implementation of our cash conversion plan and tight control over spending.
While we reduce our total net debt our leverage ratio increased from two five times at the end of 2019, two for two times in 2020.
The adjusted EBITDA was severely impacted by COVID-19.
However, excluding the first leases obligation total net debt to adjusted EBITDA stood at three times in 2020 versus two seven.
In times for the same period last year.
Now, let me comment on our cash flow on page 14.
We finished the fourth quarter of punish wrongdoings generating 48 million of cash from operations ending the year at about $133 million in 2020 up about $100 million versus 33 million last year.
The significant improvement was mainly.
Due to our proactive cash management.
Given the operating context in 2020, we manage our working capital tightly.
For the year, we reduce our inventory levels by 147 million of which approximately $110 million should be considered permit.
In addition, we emphasized the collection of receivable, which improve our working capital by about the.
$57 million year over year.
These positive cash flow were partly offset by lower operating results and the timing of vendor financing.
In turn we generated $16 million of free cash flow in the fourth quarter ending the year with 72 million in 2020 compared to $1 six in 2019.
This decrease is primarily due to the lower profitability.
The other mainly related to the lower volume rebates associated with the impact of COVID-19, the optimization of the inventory as well as the higher interest payments on long term debt.
These factors were partly offset by lower capital expenditure in line with our tight cash management of that.
Turning to page 15 please.
We manage our capital.
The deployment very prudently in 'twenty and 'twenty given the circumstances in fact, they represented about half of the capital the missed it in 2019 in essence, we reduce our capex by $60 million and our merchandised beds by $6 million. We also reduce our dividend by $6 million as we suspended it in the spring 2020 to provide more financial flexibility.
Capital that we use our excess cash to mainly reduce our debt and make a few dozen of acquisition and strategic markets in Canada in line with our capital allocation priorities.
Turning to page 16.
At the end of 2020, we had approximately 285 million of available liquidity, we managed to improve our liquidity by 83.
$3 million since the first quarter and into 2020 of which $50 million more liquidity than in 2019.
Turning to page 17.
At December 22020, we were in the compliance with all of our bank covenants based on our assumptions and expectations, we believe that our current liquidity and future cash flow and coming.
On the periods will be sufficient to meet our operating financial and capital needs.
Turning to page 19 of them for the outlook.
There remains significant uncertainty going forward from the global pandemic, the Brexit the overhang in the UK and the ongoing structural changes in the refinish market in the U S. Therefore are.
<unk> is based on certain debt assumptions and visibility as of today.
Given we were where we are today the recovery from dependent make it will take time at this point, we expect our consolidated 2021 sales to improve over 2020, but not to return to 2019 level before the second half of 2022.
Since our sales are highly correlate.
Relative to the market in which we operate the impact of the pandemic on the generally kind of environment would play a big part in the pace of our recovery.
Additionally, we expect to continue to be impacted by some level of supply chain disruption with certain manufacturers in the first half of 2021.
As mentioned previously the refinished market will take longer to recover than.
The auto parts business as it is not only dependent on miles driven but also on new car sales and traffic density.
In terms of profitability, we expect our consolidated adjusted EBITDA and the absolute dollar and on the margin basis to improve over 'twenty 'twenty, but of varying degrees depending on the business segments. This improvement will be driven by incremental volume.
Of related allowing for greater fixed cost absorption the full benefits from our past continuous improvement initiatives and continued stringent cost control measures.
Non factor to keep in mind in 2021 is that it is unlikely that we will be benefiting from the same level of government subsidies as we did in 2020.
More specifically for finished mastered.
We expect sales to improve over 2020, but we do not expect to return to 2019 level as the time that the impact from depending the skin bound by the ongoing structural changes in the refinish industry.
Market recovery is expected on the regional basis with national and episodes of sales currently recovering faster than the happened in channel.
We also expect to improve.
Adjusted EBITDA margin versus 22, Inc. As we benefit from the past investment continued to add up the business to the new market reality and continue to optimize our cost structure in the businesses.
For CAG, we expect both sales and adjusted EBITDA margin improvement over 2020 other.
Resilience of the auto parts aftermarket business the benefits.
From our past condition, the continuous improvement of investment and the improved performance of our company owned store network are bearing the fruits.
The objective continues to be the grow organically and through strategic acquisition to consolidate the market in Canada.
The two tuck in acquisitions in 2020 and expect to do some of the Selic. There's one in 2021.
Similarly for TB, we expect both sales and adjusted EBITDA margin improvement over 2020, having said this three there remains uncertainty for tpa.
One one of those issues first the impact from additional of the government lockdowns due to the pandemic second the uncertainty of supply chain issues related to Brexit.
And finally, the seasonality impact from the Ministry of transport changing mandatory testing schedule.
However, our objectives continue to be to grow primarily through Greenfield, we put greenfield on hold in 2020, given the context, but we are currently planning to open a few in 2021, depending on the market conditions for.
For modeling purposes that's.
<unk> cost for 'twenty 'twenty, one should be in line with last year, excluding the loss on the debt extinguishment, while the tax rate should be between 'twenty and 'twenty two per cent.
In terms of cash deployment, we will continue to manage our capital investment and the working capital prudently. However, we will ramp up certain investments back to pre COVID-19 level for 2021.
Finally, we expect to invest about 12 million for maintenance Capex and between 10 to 16 million for development Capex.
We also expect to invest between 2000 $14 million to $16 million in customer demand.
Centers.
We will maintain the suspension of the dividend payments until further notice.
Turning to page 20.
To conclude on comments relating to specific to each of the first quarter of 2021, while the impact of 2019. The has temporarily distorted the typical seasonality of our results Q1, 'twenty one is still expected to be soft.
Given that the the impact from dependent make the first hit our results in the later part of March 2020, our Q1 'twenty one cells.
I would not read segments are expected to be lower than the same period last year, but at varying degrees.
Let me provide you with some perspective compared to January 2020.
Our consolidated organic.
<unk> from the January stood.
The negative 12%.
With the finished master at the negative 15% kind of get negative seven.
And all of MTBE I think it is 10 per cent.
In addition, the total net debt level of Q1 will arise as it does every year due to the typical seasonality payment of rebates to our member the timing of some payables and some level of restocking in the businesses.
And 98 of our part of the comments, we expect to use a greater.
The cash flow from operation of the first half of the year and generate cash flow from operation more sort of during the second half of the year with the objective to finished weighted 'twenty one at a similar total net debt level as of Q4, 2020, and combined with an improved leverage ratio.
Yes.
In closing we are confident that we are of a solid financial.
The level of Atlanta to continue to address our current prices and sufficient liquidity to meet our current operating and capital needs.
This concludes our presentation, we're now ready to answer your questions John.
The one.
At this time I would like to remind everyone that in order to ask a question. Please press Star then the number one on the telecom.
The initial key pad well pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Ben What party does that finish up.
<unk> capital markets. Your line is now open.
Yeah. Good morning, everyone in the congratulations for the the decent quarter.
Can you provide the great.
For the 'twenty 'twenty, one outlook, but I would be curious, which segments do you expect the strongest and the weakest improvement either on absolute basis.
Terms of of organic growth or EBITDA would you be able to rank where are you you see the where you expect to see the the greatest improvement.
Great.
Well I'll, let Eric good morning, Ben what I would say you know we continue to expect CAG to perform.
Throughout the year.
It's probably the the one that certainly tpa would be in the middle of that provided there's no more further significant impacts from the lockdowns.
Certainly the one that.
Has the longest pulling of the tenant for recoveries.
It's just the refinish market itself.
And so it will be the the third as far as the recovery per month, when organic point of view.
Okay, perfect and with respect to finish Master could you maybe provide some color.
Or about the.
The further cost reduction initiatives that we might see down the road to better adjust the of the network with the increasing MSR trend.
Well you know I think we've taken a lot of actions over the last 18 months and our network footprint of sort of optimize the larger.
The larger branch network.
And we're currently in continuous review of that and what needs to be done when working with our customer base.
We won't do anything to jeopardize our service levels.
And our on our position being the leader in that space.
Yeah.
We're certainly looking at.
Every opportunity we can through automation and every other aspect of whether its route optimization of everything we can do the to further.
The benefit the performance of of that model covenants, it's the solid business just going through transformation.
Okay and last.
Churn in terms of free cash flow.
Provided the great details about the Capex expectation.
I would be curious maybe to have more granularity about the key elements that we should take into account for 'twenty and 'twenty one.
Are there any big working cap movement that we should expect.
Last question and maybe leverage ratio of where we might expect the leverage ratio to come down.
Yeah, so as it relates to how we see the working capital revolving there is no question that we will be investing in our working capital in Q1 and to a lesser extended true too.
Not unusual right as you know by the way we are in the seasonal.
In Q1 is always the most punitive quarter from a cash flow perspective for you select I would say, it's slightly more exits of exar surveyed this year with the pending me from the perspective of the recovery and the timing of that recovery.
So both of you.
You should come out of Q4, it's the lower silver of quarter typically in Q4.
Business before you're going to collect a little bit less cash in Q1. So that's part of the explanation of the other ones that you have to keep in mind that in Q1, we always base rebate to our members in Canada.
Based on the prior year results right.
And then the third element is just we will be restocking of little bit in Q1, So we will be burning cash and we had signaled that the last quarter.
And.
It's still very much what we have in our ISO my expectation is the dollar of debt level will go up in the in Q1 and two of those were extended through to and then we expect that the the dollar of debt level to come back more in line with what we had at the end of 2020 in terms of leverage ratio I expect an improvement the just because of the EBITDA should expense compared to 2020.
So our expectation is that leverage ratio will come down towards.
Towards the second part of the year.
Okay. That's great color. Thank you very much for the time.
Thank you Ben.
Your next question comes from the line of Snowman T from the venture banks. Your line is now open.
Hi, good morning, and congratulations on the decent glut of inventory of.
Just on the first quarter on the EPS side.
Yes.
On the January was down a negative 10% where NCR.
Last quarter, which was down about five points expenses I'm wondering if if if the lockdown has had more impact.
Uh Huh, it's gotten more stringent.
Or how are you looking at that time.
Yeah, but there's other there's no question go ahead Brent.
So sorry.
There's no question that we've seen the lockdown in Canada, having the impact on the the momentum that we had on our sell side.
And.
In fact, the Canadian group.
Think we signaled that we saw it really happening in the fourth quarter on the trim, the tpa where the lockdowns.
We're certainly hopeful that the changes in the Lockdowns.
And the curfews will certainly will.
The business model is resilient, so it'll come back it's a matter of timing.
And those two regards and we have seen some improvement in our for finished master trend since the first of the year as you can see.
Okay, that's great and just on for gag you had really good improvements there I'm wondering if the.
The timings of when the.
Is has that played a major of rone or.
Is that of smaller part of it.
Well I think that we certainly saw a significant improvement and a jump in the revenue.
Many of the third quarter after we come out of the the write downs in the second quarter.
It's sort of stabilized.
I think Eric and I alluded to.
We were normalized run rate in the second half of 19.
Versus 19 and in the.
Last in this last year.
So you know it's.
It's it's a it's a solid and sort of solid position. So I think you know I don't see any real spikes, Canada doesn't have a lot of spikes up.
Other than the seasonality.
Okay, and just lastly, I mean, probably if you could speak on the three segments are there any changes on the pricing side or is that something that's consistent to how historically it has been.
We haven't seen any increase in interest.
The significant increases in cost.
From the manufacturers of pricing now the only thing I would tell you is you know all of US are facing the freight costs from China and the great in the just becoming a bigger burden for all three of the business, especially the parts side.
I would say predominantly the parts.
I'm not saying side.
So that's the only thing in the supply chain, it's been disruptive it is disruptive.
Both from receiving the goods and the cost of the receiving from historically, but that will sort of normalize itself over the year.
And I know the topline I may add that on the paint side theres been announcements.
And placement of manufacturers of price increases, which will push through and some some started in December but there's more to come the during the quarter.
And typically we're are able to push those price increases range with the traditional segments for instance in the painting.
But oftentimes the inflation in the auto parts of businesses its not a bad thing for us for the sense that it's something that we can push.
The price up to a two of the market ultimately right because it's the past more or less.
Okay. Thanks for the color that's it for me. Thank you. Thank you.
Thank you.
Again, if you would like to ask the question.
Star then the number one on your telephone keypad.
Your next question comes from the line of Daryl Young from TD Securities. Your line is now open.
Good morning, guys.
Morning Dara.
Question on finish Master I'm, just wondering if through the through the pandemic there's been some smaller play.
Players consolidating and.
And I'm just curious if there's been any shifts in market share or if you feel that you are holding your own true through this environment and yeah, just a little bit more color there on the competitive dynamics.
Yeah, I would tell you that we still see a significant activity at the <unk>.
At the repair side on the MSL side and where the national.
Accounts, we see them Macquarie.
As far as in the distribution side, it's a very small movement, that's happening right now and it has happened through the pandemic.
Yeah.
And quite frankly, we've been tracking our our market trends by down to the.
For the lowest level.
National and we can get any data.
Through CCC and.
And we feel very confident of that we haven't lost any market share.
And any of the markets that we participate in which is roughly about 30 32 states that we're in EMS and the and.
And the finish master of footprint.
And would you say.
We gained more volume directed through the Msos and three of them. So customers it would be the ones driving the bulk of your sales.
Absolutely. The you know we've been very clear that as the.
Because of the pandemic sort of society, a little bit of in Q2, as we come out of that in Q3, and Q4 that we've seen the margin.
You see it rebound quicker to the MSL of National accounts and that has been the traditional market.
Yes.
Okay, Great and then on the the supply chain disruptions you you've mentioned that a few times in the past, but hasn't really seemed to impact them.
Margins in any particular.
The market is there anything different this time around that.
The cause for concern or just the general disruption of the Covid environment.
Well I would say no disruption on the supply chain.
On the paint side of the refinish side.
Most of that is produced in North America as you know.
For quarter, and so I would say, though for us on the parts side. It has been it's been pretty.
Pretty dicey the last 60 days 90 days, both for Tpa in Canada, just to receive the right supply from our manufacturer partners.
Certainly it's temporary.
And it's all Covid impacted.
The plants closing the.
The <unk> not being able to work our freight lines of being sorted out you know as you as.
As you know.
It's been something that we're managing kind of day.
Dynamic way.
But clearly it's something that has or it's our top attention right now is to make.
The product that has an impact of this from us.
From a margin perspective is really.
Certain of the concern of a top line and making sure we get the right products, so the customer base and the right time.
Okay, and then just coming back to the niche master of quickly is there a target margin.
Sure well you guys are hoping to sort of run rate at when when the environment normalizes or is based on the cost cutting done the date and recovery in sales as you get sort of of target.
Margin there.
Well I think we've said that we believe the the business can certainly be in the 6% to 8% EBITDA range.
Right.
I would tell you were there other if you normalize the volume of the finish master in Q4 to sort of 2019, the sales volume the.
EBITDA margin would expand by at least 230 basis point right, just just because of the volume aspect of it.
So you know what part of the part of it and it's meant that the finished master will be.
Volume gain basically.
We've done a lot of work on the cost of it there's still some sort of opportunity obviously and we will continue to do sort of like we do in the two other businesses.
But for now I think that that's the way we have in our radar at this point.
Got you Okay. That's it for me congrats on the good quarter guys. Thanks.
Thank you.
Again, if you'd like to ask a question. Please press Star then the number one on your telephone keypad. Your next question comes from the line of Jonathan Lammers from BMO capital market. Your line is now open.
Yeah.
Good morning, John Good morning, Yes, good morning.
Thanks for the comments.
So far just circling up on finish Master do you have the portion of sales that msos represented in 2020.
Yeah.
No not at my fingertips the Jonathan.
I guess I'm, just curious I know that they took share in 2020.
I would think of it the independents where.
Hit harder than the Msos.
Could there actually be an opportunity for some of that mix too.
Reverse or at least the main.
<unk> stable in a in a scenario where.
Vehicle miles traveled normalized.
Yeah. So the the way I would answer that is there's two factors to keep in mind you. The right. One is just the overall traffic volume in the incident rates that will likely.
Rebound somewhat as the economy reopens.
And then the question is it was getting that business. So for now with the insurance companies of.
Redirected that volume more so to the Msos and national accounts Ah I suspect that the other was company you start adding a higher volume there will be more opportunities for the traditional segments to read out, but I would say that's one element.
And then the other factor is the consolidation rate will you be seen the EBIT in 2020 consolidations the still.
And we expect this to continue to happen.
Sure I think that that's the color I could give you for now.
Okay, that's all of the John It Jonathan.
The.
The share mix is pretty much the same as what he said.
In Q4 and Q3, its about 35 46 per cent.
Happened or some of the business that hasn't really changed.
Some of our mix of assistance there.
There's less of the.
Yes.
Of the traditional side right now.
Okay.
And on the Greenfield opportunity.
For the.
The U K.
Of that Youre looking to later end of 'twenty 'twenty, one can you expand a little bit on that as that of continuation of the same strategy that a tpa was taking prior to COVID-19 and get the kind of frame how big the opportunity might be.
Yeah, I think so.
I think we've always said.
Said that it would be somewhere around you know, there's probably 15 to 25 locations that we like the expand to strategically over time.
And I think all we're doing is picking the pace back up and.
And as Eric alluded to depending on the conditions of the.
The we're in we have the line of sight for locations and prioritization.
<unk> of where we'd like to grow into.
So the teams are working on those the contingent based on the market rebounded.
Thanks, and just a technical question Eric.
Eric would you happen to have the <unk>.
Monthly breakout of organic sales for.
Q1 of 2020.
So on a consolidated basis in Q1 2020.
The organic growth was negative 2% I don't either by months here that was for the Florida.
Cash was negative $4 nine.
EBITDA was negative $4 five right, sorry, I said non consolidated F. N was negative 2% of consolidated was negative $2 nine.
From a month to month pattern I don't have that in front of me, but something that we can protect.
Okay. Thanks for your comments.
Thank you.
Your next question comes from the line of Zachary <unk> from National Bank Financial Your line is now open.
Morning, everyone congrats on the quarter.
Good day.
Mm Hmm.
Hoping you could drill down on the timing of the price hikes and pass throughs and how much friction there my account margins due to a lag.
The before you're able to push that through.
Oh, sorry.
Yes.
How would you be able to drill down for us on the timing of the price hikes and pass throughs and whether there might be any friction there due to a lag between the implementation.
Factors and you guys being able to push through the pricing.
Well, we we haven't news or the a lot of the lead from that perspective, right. When the manufacturer announced the price increase on a given day price goes up and anything else. They just bought thereafter by the customer is subject to that price increase the <unk>.
Question is how much of that price.
The menu.
Do you contractually protected by the customer or not so that the patents.
All your debt.
On the automotive side most of our.
Our ability to push price increases is pretty its pretty good across the board and the pain business. Some of the national accounts or some of the Msos may have some price protections on the traditional side, we are able to push dose.
The increase increases.
But in terms of timing of price increase it it's pretty immediate there's nowhere theres no big delay as it relates to that.
That's helpful. Thanks, and then on that topic of.
The Msos, obviously repair of consolidation is going to remain a headwind and youre.
It was frightening at route optimization automation and of course the return on the volumes will also help margins is there anything else that you're looking at to help F. N margins improve to the top end of that six to eight per cent range.
We're also looking in Brent Brent can emphasize on some other initiatives, but we are looking at our logistics per se.
We're looking at how we byproduct, how we distribute the product within our branches and there might be some some additional of what you need is there but the.
They are very much of a stream of of initiatives that are ongoing.
So there are there's a lot of the a lot of activities in the three businesses to further optimize and protect what you've done in 2020.
Yeah.
Thank you and the last one for me, obviously, the strategic review and it ages ago, but with the big shakeup in the pandemic are you still open the options that might narrow the focus of the business.
Well I mean I think.
The right time right context the.
Everything is possible right.
Where we are we're not.
Oh Gee for Ya mode at this point.
And I think we're pretty much looking at optimizing the businesses and I think we've done the significant stride in the last 12 18 months from that regard.
Brent I don't know if you want to add or comment further.
And at this point, where we're operating the business and looking at making sure.
Sure.
Protect their assets and come out of this.
Not only keeping our market share, but in a position to grow it in and optimize our cost of service.
Thank you very much I'll turn it over.
Thank you.
There are no further questions at this time, Mr. Brent Windom. Please.
Non interest.
So thank you very much for joining us and we look forward to speaking to you next quarter and stay safe be healthy and thank you for being here today.
This concludes today's conference call you may now disconnect.
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