Boyd Group’s Q1 2025: Structural Gains Outperforming a Slump

Boyd Group Services Inc. (TSX: BYD.TO) has emerged as a beacon of resilience in the collision repair sector, defying industry headwinds through disciplined execution of its Project 360 cost-savings initiative and strategic operational shifts. While Q1 2025 results reflect near-term pressures from declining insurance claims and economic uncertainty, the company’s focus on margin expansion, market share dominance, and scalable cost levers positions it to capitalize on long-term growth. Here’s why investors should view this as a buy opportunity.

Operational Resilience in a Slumping Market

The collision repair industry faces a perfect storm: premium inflation, reduced repairable claims, and supply chain volatility. Boyd Group, however, is countering these challenges with structural improvements that defy the sector’s decline.

First, Project 360, launched in late 2024, is already delivering results. The $100 million annual cost-savings target by 2029 includes $30 million in realized savings from Q1 2025 alone, driven by:
- Internalization of Scanning/Calibration Services: A 125% staffing increase (from 98 to 225 employees) in 2024 reduced reliance on third-party providers, boosting gross margins to 46.2%—a 140 basis-point improvement year-over-year.
- Procurement Efficiency: Streamlined parts sourcing and process automation are cutting costs while maintaining service quality.

Second, Boyd’s market share gains underscore its competitive edge. Despite industry-wide sales declines of 7.9–9.0%, Boyd outperformed by +2.8%, with same-store sales narrowing to a 1.8% decline in 2024—far better than peers. This reflects the company’s ability to capture premium pricing in high-demand markets like Canada and its strategic start-up locations, which now total 28 in 2025, prioritizing scalability.

Margin-Driven Growth: The Path to $700M EBITDA

Boyd’s gross margin expansion is a critical lever for achieving its 2029 targets: $5 billion in revenue and $700 million in Adjusted EBITDA, with a 14% EBITDA margin. Key catalysts include:
1. Location Expansion: 28 new shops in 2025, focusing on high-growth regions, will drive top-line growth while leveraging Boyd’s proprietary technology stack (e.g., auto glass telematics).
2. Debt Management: Despite near-term debt growth, Boyd’s extended revolving credit facilities (now $850 million) and $312 million remaining under its buyback program ensure liquidity for growth while maintaining a 2.0–2.5x net debt/EBITDA ratio—comfortably within targets.

Why Buy Now, Despite Volatility?

Critics may point to Q1’s same-store sales weakness or the $20–23 million in upfront Project 360 costs. But this is a short-term distraction. Boyd’s long-term playbook is clear:
- Cost Discipline: The $30M savings already achieved in 2025 are just the start. Full Project 360 implementation by 2029 will solidify Boyd’s top-tier margins.
- Market Share Monopoly: Boyd’s 22% U.S. collision repair market share and leadership in Canada’s Assured Automotive network create moats against competition.
- Execution Track Record: The company’s ability to grow EBITDA at a 15% CAGR over the next five years, despite macro headwinds, is unmatched in a shrinking sector.

Conclusion: Boyd’s Structural Edge Justifies a Buy

Boyd Group isn’t just surviving—it’s redefining the collision repair landscape. With $100 million in annual cost savings, a 46.2% gross margin, and a 14% EBITDA margin target, Boyd is the rare company turning industry-wide pain into shareholder gain. Even as Q1 2025 highlights near-term volatility, the structural improvements and strategic discipline make this a buy for investors with a 3–5 year horizon.

The collision repair sector may be in a slump, but Boyd’s playbook ensures it will emerge stronger. Act now—before the market catches up.