Annual Meeting Q1 of Shareholders Financial Highlights 2017
Forward-Looking Statements (For definitions of capitalized terms, please refer to the Glossary in Enercare’s MD&A dated May 11, 2017) This presentation contains certain forward- looking statements within the meaning of applicable Canadian securities laws (“forwar d- looking statements” or “forward -looking information”) that involve various risks and uncertainties and should be read in conjunction with Enercare Inc.’s (“ Enercare ”) 2016 audited consolidated financial statements. Additional information in respect of Enercare, including the AIF, can be found on SEDAR at www.sedar.com. Statements other than statements of historical fact contained in this presentation may be forward- looking statements, including, without limitation, management’s expectations, intentions and beliefs concerning anticipated future events, results, circumstances, economic performance or expectations with r espect to Enercare, including Enercare’s business operations, business strategy and financial condition. When used herein, the words “anticipates”, “believes”, “budgets”, “could”, “estimates”, “expects”, “forecasts”, “goal”, “intends”, “may”, “might”, “outlook”, “plans”, “projects”, “schedule”, “should”, “strive”, “target”, “will”, “would” and similar expressions are often intended to identify forward- looking information, although not all forward-looking information contains these identifying words. These forward-looking statements may reflect the internal projections, expectations, future growth, results of operations, performance, business prospects and opportunities of Enercare and are based on information currently available to Enercare and/or assumptions that Enercare believes are reasonable. Many factors could cause actual results to differ materially from the results and developments discussed in the forward-looking information. In developing these forward-looking statements, certain material assumptions were made. These forward-looking statements are also subject to certain risks. These factors include, but are not limited to: • actual future market conditions being different than anticipated by management; • the failure to realize the anticipated benefits of the Service Experts Transaction (“SE Transaction”) , strategic initiatives and tax efficiencies; • the risk that the pilot of rental HVAC offerings in 5 states in the United States does not realize anticipated results as the rental model is a new concept in this industry in the United States; and • the risks and uncertainties described under “Risk Factors” in Enercare’s MD&A dated May 11, 2017. Material factors or assumptions that were applied to drawing a conclusion or making an estimate set out in forward-looking statements, including pro forma financial information, include: • the view of management regarding current and anticipated market conditions; • industry trends remaining unchanged; • the financial and operating attributes of Enercare and Service Experts as at the date hereof and the anticipated future performance of Enercare and Service Experts; • assumptions regarding the volume and mix of business activities remaining consistent with current trends; • assumptions regarding the interest rates of the 2016 Term Loan, foreign exchange rates and commodity prices; and Annual Meeting • the number of Shares outstanding remaining constant. There can be no assurance that the anticipated strategic benefits and operational, competitive and cost synergies from the SE Transaction will be realized. There can be no of Shareholders assurance that recent results from the introduction of the rental model to Service Experts in Canada are indicative of future results. Readers are cautioned that the preceding list of material factors or assumptions is not exhaustive. Although forward-looking statements contained in this presentation are based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Accordingly, readers should not place undue reliance on such forward-looking statements and assumptions as management cannot provide assurance that actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Enercare. All forward-looking information in this presentation is made as of the date of this presentation. These forward-looking statements are subject to change as a result of new information, future events or other circumstances, in which case they will only be updated by Enercare where required by law. 2
JOHN MACDONALD President & CEO Annual Meeting of Shareholders
2017 Strategic Priorities Enercare Sub-metering Service Experts Home Services 1. Grow net rental units 1. Roll-out the rental 1. Grow contracted units program 2. Grow protection plan 2. Add new products and portfolio 2. Deliver procurement services synergies 3. Enhance mobile app and 3. Focus on customer Annual Meeting develop connected 3. Execute roll-up satisfaction of Shareholders home offering acquisition strategy Stable EBITDA Growth 4
Growing the Home Services Rental Portfolio ONE Growing Additions TWO Reducing Attrition 13,000 A. B. Annual Rental HVAC The Buyout Contract Bill 55- The Stronger Protection • Technician leads for Ontario Consumers Act ~38,000 C. D. ~25,000 Annual Door-to-door Annual Rental Water heaters Bill 59 - Putting Consumers Gross Adds • Energy Sales Ban (AB) Technician leads First Act (ON) • Builder network • Dealer network E. Customer Retention Programs Enercare Home Services Net Rental Units (000s) 7 Consecutive 3 3 Annual Meeting 2 Quarters of 1 1 1 1 Organic Growth of Shareholders Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 -2 -3 Bill 59 - Putting Consumers First Act , if enacted as proposed, will completely ban door-to-door sales in Ontario of certain household appliances, including water heaters and HVAC 5
Rental Rate Growth Drivers 1 Annual Price Increases Enercare Home Services Enercare has successfully implemented rental rate increases of Annual Average Monthly approximately 3% on the majority of residential water heaters in Rental Rate Changes its portfolio in each of the last 4 years (i.e., 2014-2017). 4% 2 Product Mix Changes $23.12 $22.20 Rental Portfolio Revenue HVAC 3% 9% Highest Revenue Tankless 3% 44% PV 45% Annual Meeting Product Revenue of Shareholders 44% CV 32% 2015 2016 3% 4% Electric 6% 7% Other Lowest Revenue 2007 Q1 2017 6
Focused on Growing Protection Plans March 31, March 31, 2016 2017 Ending 3,000 Protection 543,000 546,000 Improvement Plan Contracts 36% 14,000 19,000 Additions Improvement 2,100 Attrition from HVAC 6% Rental 16,000 15,000 Attrition Additions Improvement Annual Meeting of Shareholders Approximately two thirds of Enercare’s HVAC originations come from a protection plan relationship 7
What’s Next for Enercare Home Services? Geographic & Whole Home Innovation Product Growth Continue growth across Ontario, Become trusted service adviser, deliver Lead in Connected Home; leverage launch new products that multi-product value offering and increase strengths in service delivery to build complement existing services and our share of the household customer value build on our strengths in heating, cooling and plumbing Electrical Services Connected Home Connected Enhancements Annual Meeting Air Conditioning Home Pilot to Duct Cleaning Mobile App of Shareholders Air Quality Plumbing Furnace or Boiler One Year Water Heater Anniversary Water Treatment Introduced the Home Services Industry’s 1 st Mobile App of its Kind 8
Attractive Market Size and Existing Base (as at Q1 2017) 50% ~245,000 50% New Construction Units Total Number of Retrofit Units Contracted Units Sub-metering Services Business Model Annual Meeting of Shareholders Estimated units Estimated unmetered constructed in Ontario* units remaining in Ontario** *CMHC Housing Market Outlook Ontario Edition, Q2 2016: ~40,000 additional units to be added per year in both 2016 and 2017 ** Based on Enercare’s building database using known buildings with estimated number of units (as at Q2 2016) 9
Achieving Scale in Sub-metering Unit Continuity 245 (In thousands) 235 205 185 168 166 165 156 155 151 136 132 119 116 115 103 96 94 93 82 77 71 57 50 Annual Meeting 2010 of Shareholders 2011 2012 2013 2014 2015 2016 Q1 2017 Contracted Installed Billable Strong embedded revenues in contracted units pipeline: 2 to 1 versus billing units 10
The PowerHawk Meter Generation 5 G3 – 6320 (2005) G4 – 6312 (2009) G5 – Series 7 (2017) Product Generation • Billing-Grade • Commercial Metering • Water & Gas Metering (via Pulse Inputs) • Residential (Wh) • (Wh,VARh, PF ) Enhanced • Modularity • Multi-Point Meter • BAS Protocols Product • Wireless • 20 Electricity Meter • 24 Electricity Meter • European Standards Functionality Points Points • Up to 48 Electricity Meter Points Annual Meeting of Shareholders • Canadian • Canadian Commercial • Electricity, Water & Gas Residential • US Commercial + • Expanded Commercial • Electricity Sub- Residential & OEM Increasing Metering Market • OEM • Europe Market • Limited International • “Future” Markets Reach enabled by modularity 11
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