Solera’s CEO Talks Glass During Quarterly Report

Tony Aquila

Tony Aquila

The addition of the automotive glass claims business has not yet had much of an impact on business, according to Tony Aquila, CEO of Solera Holdings. But he expects this to change soon.

Solera, new parent company to LYNX Services, GTS Services and GLAXIS, reports that revenue for the fourth quarter came in at $267.9 million, up 22.6 percent over the prior year’s revenue of $218.5 million.

“We just got our hands on the [glass] asset and we’re in the early phase, although we got a good three weeks of work in that already,” says Aquila during the company’s conference call. “We think there is, as I mentioned, some additional things we can do with that asset, but we have not reflected that yet [in our results].”

The company is not yet assuming any incremental contribution from the glass business going forward, he notes.

“With the acquisition of Insurance and Services (I&S), the No. 2 player in the glass repair and replacement market in the United States, we have rounded out our portfolio to create the United States-only platform that spans the entire auto repair lifecycle—collision claims, mechanical repair, parts exchange and now glass,” Aquila says.

“There are about seven million insured glass claims annually in the United States,” he adds. “Many of these claims occur outside of the collision and are typically outsourced by insurance carriers. Having an end-to-end platform creates significant efficiencies for our customers and their customers and conditions Solera to increase our share of wallet over time. We are beginning to operationalize these acquired businesses using the Solera principles …”

Based on the glass claims services the company already offers in France and other countries, Aquila says “the pipeline is looking good from a product mix and for revenue growth per transaction.”

“There may be still some pressure on the collision side, but we can capture some claims we couldn’t get before,” he adds.

“[D]emand is going up because we have so much to offer,” Aquila explains. “At a mechanical shop, say a guy comes in and has a door latch problem and the glass is broken. Before that would have been a transaction to another provider and today with Solera, they can do all that with us.”

Aquila notes that the company will continue to “aggressively pursue targets and deploy capital in a disciplined manner.”

For fiscal year 2014, Solera’s revenue was $987.3 million, a 17.8-percent increase over the prior fiscal year revenue of $838.1 million. After adjusting for changes in foreign currency exchange rates, revenue for fiscal year 2014 increased by approximately 16.8 percent over the prior fiscal year revenue, according to officials.

“Solera had a strong finish to a solid year, with constant currency total revenue growth of 16.8 percent for the full year and 20.6 percent for the fourth quarter, despite volatility in certain European markets,” says Aquila.  “As a result of the momentum we created in fiscal-year 2014 from deeper penetration into the household, we now have the confidence to raise the bar on Mission 2020.  As a first step, we are now targeting a 42 percent adjusted EBITDA margin, which is a 200 basis point increase from our original 40 percent margin target and represents $40 million of additional adjusted EBITDA.  This demonstrates the strength of our business model and the benefits of our diversification across markets, customers and products.”

Looking specifically at the Americas, the company reports revenues were $132.5 million and $469.5 million for the fourth quarter and the full fiscal year, respectively. This represents a 35.8-percent and 28.0-percent increase over the prior year periods. After adjusting for foreign currency exchange rates and excluding the revenues of Service Repair Solutions, Solera reports Americas’ revenues for the fourth quarter and the full-fiscal year increased 6.8 percent and 9.9 percent over the same time periods in the last year.

Solera’s revenues from insurance company customers came in at $98.2 million and $385.5 million for the fourth quarter and the full fiscal year, respectively. This is a decrease of 0.2 percent and an increase of 3.1 percent over the respective prior-year periods. After adjusting for foreign currency exchange changes, revenues from insurance company customers for the fourth quarter decreased 1.0 percent and increased 3.0 percent for the fiscal year.

This article is from glassBYTEs™, the free e-newsletter that covers the latest auto glass industry news. Click HERE to sign up—there is no charge. Interested in a deeper dive? Free subscriptions to Auto Glass Repair and Replacement (AGRR) magazine in print or digital format are available. Subscribe at no charge HERE.

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