Uni-Select Inc.

Uni-Select reported 2022 sales of $1.73 billion, up on 10.7% organic growth, with adjusted EBITDA of $185 million, up 26%, and diluted adjusted EPS of $1.74, up 67%. In Q4, consolidated sales rose 6.2% to $425 million from $400 million; adjusted EBITDA was $39 million, or 9.2% of sales, versus $37 million, or 9.4%, and diluted adjusted EPS was flat year over year at $0.32. By segment in Q4, FinishMaster sales were $173 million and EBITDA was $14.4 million; Canadian Automotive Group sales were $150 million and EBITDA was $18.1 million; GSF sales were $101 million and EBITDA was $10.2 million. Cash flow from operations was about $45 million in Q4, free cash flow was $40 million, full-year free cash flow was $152 million, net debt was $234 million including $96 million of IFRS 16 lease obligations, net debt to adjusted EBITDA was 1.3x, and available liquidity was $281 million. For 2023, management guided only directionally, saying it expects higher adjusted EBITDA and adjusted EPS versus 2022, while still facing FX, labor, inflation, and supply-chain headwinds.

Brian McManus framed 2022 as a turning point, with the company moving from pure improvement to a more balanced growth strategy through acquisitions in Canada and selective greenfield openings in the UK. He emphasized that the strategy for 2023 remains organic sales growth, operational improvement, and synergy capture, while acknowledging persistent headwinds from currency, labor, inflation, and supply chain issues. His tone was confident and constructive, but cautious on near-term external pressures.

Anthony Pagano highlighted strong financial execution across the business, especially cash flow and balance-sheet improvement. He said Q4 operating cash flow was about $45 million, free cash flow was $40 million, and full-year free cash flow reached $152 million versus $92 million last year; net debt declined to $234 million and leverage improved to 1.3x, with $281 million of available liquidity. On margins, he pointed to mix, scaling benefits, pricing, and vendor rebate timing as key drivers, while inflation, higher delivery/travel/fuel costs, bonuses, and bad debt normalization pressured results in some segments. He also said working capital had already been substantially rightsized and that he would not expect meaningful working capital releases in 2023.

Analysts focused on GSF margins, pricing trends, labor pressures, vendor rebate timing, working capital sustainability, private label demand, the acquisition pipeline, and whether the company could keep growing if topline momentum slowed. Management said GSF’s higher margin was mainly due to scaling benefits and better sales, and that they are comfortable with margins if viewed on an LTM basis; they also said pricing pressures have eased somewhat but are still present across divisions, with no major concern about deflation. On cash flow, management said 2023 should see working capital grow roughly in line with sales rather than produce big releases, and on capital allocation they reaffirmed acquisitions as the priority while leaving shareholder returns as a Board decision.