Boyd Group Services has launched its latest five-year goal that it says will “drive growth and enhance profitability” through 2029.

CEO Tim O’Day said now is the ideal time to implement a five-year plan since he’s preparing for retirement and Brian Kaner will take the helm in May. Kaner is currently Boyd’s president and chief operating officer. He joined Boyd in October 2022 as COO of collision operations.

During a Feb. 26 conference call about the plan, O’Day said the company has nearly achieved its goal that began in 2020 to double business size by this year. The new goal is to double adjusted EBITDA to $700 million by the end of 2029.

“Our success has been rooted in the execution of our proven accretive growth strategy within the $50 billion North American collision repair industry,” O’Day said. “Currently, we’re holding the No. 2 market position with only 6% market share, and we’re confident that the strong long-term fundamentals of the industry coupled with the continuation of our proven growth strategy will support the next phase of our growth and enable us to continue to generate strong returns for our shareholders.”

Key highlights of Boyd’s five-year goal:

• • Grow revenue to $5B in 2029
  • Double Adjusted EBITDA to $700M between 2024-2029 (based on Q3/2024 TTM results)
  • Expand market share and retain a leadership position in all markets served
  • Achieve top-tier profitability in the North American collision industry

Kaner added that Boyd aims to reach $5 billion in revenue and grow its market share through a combination of same-store sales growth in new locations, representing a 14% adjusted EBITDA margin and a 15% compound annual growth rate.

“This goal is supported by the launch of Project 360 — our company-wide profitability transformation plan launched in Q4 of 2024, which is projected to generate $100 million in annual recurring cost savings and enhanced margins over the five-year period,” he said.

Project 360 is designed to expand margins as Boyd scales its business and grows its market share, according to a press release from the company. Key focus areas include optimizing the store operating model to improve profitability as volumes scale, enhancing parts and indirect procurement to drive cost efficiencies, and leveraging technology to streamline operations and improve scalability.

“We are confident that as we execute this plan, we will further solidify Boyd’s leading position in the North American collision market and drive strong returns for our shareholders,” Kaner said in the release.

The release laid out the key strategic initiatives of the plan:

• • Expansion through single shop acquisitions, brownfield and greenfield startups, and small multi-location acquisitions focused on attaining a No. 1 or No. 2 position in each market.
  • Boyd says it’s well-positioned to fund growth with an estimated $1.5 billion in cash available for growth through the plan period and will continue to be a strategic buyer of larger multi-location acquisitions.

“We expect an increasing number of our single shop growth will come from brownfield and greenfield units,” Kaner said. “These facilities allow us to build a facility that meets the long-term needs of the business with a dedicated space for glass calibration and collision all under one roof. These strategically placed facilities support our other collision facilities, enable us to gain market share, densify our markets, and achieve our goal of securing a one or two position in all markets we serve.

“Brownfield and greenfield locations ultimately deliver higher returns on invested capital post maturity. Additionally, they offer Boyd a stronger platform for achieving leverage as we scale the business. While our pace of single-shop growth has slowed in 2024 as we focused on the short-term headwinds in our market, we have a robust pipeline of opportunities to add new locations in our markets.”

He added that despite a 9.7% decline in repairable claims in the nine months that included Q3 2024, history has shown that the market normalizes as factors that slow growth lessen.

“The North American collision industry faced several short-term headwinds in 2024 including a mild winter, rising total loss rates due to lower used car prices, customers deferring claims amid economic uncertainty, and the significant increase in insurance premiums,” Kaner said.

“We believe that the Great Recession provides a useful comparison to the headwinds experienced in 2024… In addition, several long-term structural shifts are positively impacting the industry. The increasing complexity of vehicles and the growing need for scanning and calibration services have contributed to a 40% rise in the average cost of repair over the past five years, which has been a benefit to larger players like us.”

During the Q&A portion of the call, an investor said that the plan seems like a departure from Boyd’s previous messaging on MSO acquisitions.

“We’ve always said that we would look at any large MSO that came on the market,” he said. “If the economics were right, we would be in a position to move forward. I don’t know that there’s anything that’s meaningfully changed in the marketplace today. Obviously, as we’ve talked previously, many of those have traded in the recent 18 months but there’s a few still out there that if they came to market, we would be willing to take a look and obviously would only do something if the economics made sense.”

Kaner said the start of Boyd’s new greenfield strategy will be seen near the end of this year and then will be pretty constant.

Boyd will hold its Q4 2024 and year-end earnings call on March 19 at 10 a.m. ET.

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