Monro : Investor Presentation – September 2020

Monro, Inc. Investor Presentation September 2020

Safe Harbor Statement and Non-GAAP Measures

Certain statements in this presentation, other than statements of historical fact, including estimates, projections, statements related to our business plans and operating results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Monro has identified some of these forward-looking statements with words such as "anticipates," "believes," "expects," "estimates," "is likely," "predicts," "projects," "forecasts," "may," "will," "should," and "intends" and the negative of these words or other comparable terminology. These forward-looking statements are based on Monro's current expectations, estimates, projections and assumptions as of the date such statements are made, and are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward- looking statements, to include the significant uncertainty relating to the duration and scope of the COVID-19 pandemic and its impact on our customers, executive officers and employees. Additional information regarding these risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission, including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our most recently filed periodic reports on Forms 10-K and Form 10-Q, which are available on Monro's website at

https://corporate.monro.com/investors/financial-information/.Monro assumes no obligation to update or revise these

forward-looking statements for any reason, even if new information becomes available in the future.

In addition to including references to diluted earnings per share ("EPS"), which is a generally accepted accounting principles ("GAAP") measure, this presentation includes references to adjusted diluted earnings per share, which is a non- GAAP financial measure. Monro has included a reconciliation from adjusted diluted EPS to its most directly comparable GAAP measure, diluted EPS in Slide 17. Management views this non-GAAP financial measure as a way to better assess comparability between periods because management believes the non-GAAP financial measure shows the Company's core business operations while excluding certain non-recurring items and items related to our Monro.Forward or acquisition initiatives.

This non-GAAP financial measure is not intended to represent, and should not be considered more meaningful than, or as an alternative to, its most directly comparable GAAP measure. This non-GAAP financial measure may be different from similarly titled non-GAAP financial measures used by other companies.

2

Company Overview

A Leading Chain of Independently Owned and Operated Tire and Auto Service Locations

• Dominant in the Northeastern U.S. and expanding in Southern and Western markets
• Fiscal 2020 sales of $1,256.5 million
• 1,244 company operated stores in 32 states and 97 franchised locations as of August 20, 2020
• 39 acquisitions in the past 8 fiscal years, adding 518 locations, $710 million in revenue and entry into 13 new states
• Operating two store formats in key markets

−Service brand stores - 473 stores

• 75% maintenance service, 25% tires
• $675,000 a year in sales per store

−Tire brand stores - 771 stores (excluding wholesale)

• • 55% tires, 45% maintenance service
  • $1.0 million a year in sales per store
• 7 wholesale locations and 3 retread facilities

Store locations as of 8/20/20

3

A Unique Operating Model

Monro Has a Diversified Supply Chain, Sourcing High Quality, Low Cost Parts Direct and a Strong Portfolio of Tire Brands

PARTS

Monro sources these parts from leading	Secondary parts distribution:
aftermarket parts suppliers:
▪ Brake Rotors and Pads
▪	Filters
▪	Steering and Suspension
▪	Wipers
▪	Belts

TIRES

Store locations as of 8/20/20

4

A Favorable Industry Backdrop

Favorable Industry Backdrop for Automotive Services with the

Vehicles in Operation Expected to Grow Significantly Over the Next Few Years

20U.S. Annual Light Vehicle Sales

18
16
14
12
10
8
6
4
2
0
04	05	06	07	08	09	10	11	12	13	14	15	16	17	18	19

Source: FRED Economic data, Light weight Vehicle Sales: Autos and Light Trucks

3,300,000						Total Miles Traveled in U.S.
3,225,000
3,150,000
3,075,000
3,000,000
2,925,000
2,850,000
2,775,000
04	05	06	07	08	09	10	11	12	13	14	15	16	17	18	19

Source: FRED Economic data, Moving 12-Month Total Vehicle Miles Traveled

U.S. Light Vehicles in Operation (VIO)

300

290

280

270

260

250

240

230

220

210

200 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021* 2022*

Source: Lang, IHS Markit. *2020 - 2022 are estimated figures

Key Highlights

• Growing total vehicle population related to consumers owning vehicles longer
• 270+ million vehicles on the road
• Increasing age of vehicles (average of ~12 years)
• 2019 total annual miles driven up ~0.9% y/y
• Increasing complexity of vehicles
• Favorable demographics

5

A Favorable Industry Backdrop

Monro is Well-Positioned to Capitalize on Positive Industry Trends,

with Our Sweet Spot Experiencing the Fastest Growth in Vehicles in Operation

Vehicles in Operation - 0 to 5 Years

120				+6.56% CAGR						-.03% CAGR
110
100
90
80
70
60
50
2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022

Vehicles in Operation - 13+ Years

120		+4.27% CAGR	+1.47% CAGR
110
100
90
80
70
60

50

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source for all data: Lang, IHS Markit, 2018

Vehicles in Operation - 6 to 12 Years

120				-3.97% CAGR								+3.90% CAGR
110
100
90
80
70
60
50
2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022

Key Highlights

• Strong growth in new vehicles (0-5 years) between 2012 and 2017 is creating a significant tailwind for the 6-12 year old vehicle cohort for the next few years
• 6-12year cohort expected to grow the fastest at +3.9% CAGR for the period 2017-2022
• Monro's targeted market segment is the 6-12 year cohort

6

A Favorable Industry Backdrop

Monro Operates in the $246 Billion Do-It-For-Me* Segment of $308 Billion U.S. Automotive Aftermarket Industry

Automotive Aftermarket DIFM vs. DIY Sales

350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2012	2013	2014	2015	2016	2017	2018	2019
			DIFM	DIY
Source: Autocare Association Factbook			Census data for 2012; estimates for 2013-2019

DIFM vs. DIY Trends

• DIFM continues to account for a significant percentage of the automotive aftermarket
• Vehicle complexity continues to drive shift to DIFM from DIY
• Future technology advances expected to accelerate shift to DIFM

	2010	%	2019	%	CAGR
	(outlets)	(outlets)
Dealers	18,460	14.3%	16,741	12.7%	(1.1%)
General
Repair	76,108	58.8%	81,678	61.8%	0.8%
Garages
Tire Dealers	18,675	14.4%	20,299	15.4%	0.9%
Specialty	8,663	6.7%	6,150	4.7%	(3.7%)
Repair
Oil	7,518	5.8%	7,276	5.5%	(0.4%)
Change/Lube
Total	129,424	100.0%	132,144	100.0%

Source: Autocare Association Factbook

Key Highlights

• Industry still highly fragmented, with significant opportunities for further consolidation

* Includes Replacement Tire Segment

7

Driving Long-Term Sustainable Growth

Improve Customer Experience

• Online reputation management
• Consistent in-store experience
• Consistent store appearance

	Scalable Platform to
Enhance Customer-Centric	Drive Sustainable
Engagement	Growth

• Customer retention
• Customer acquisition
• Omnichannel

Optimize Product & Service Offering

• Redefined selling approach
• Optimized tire assortment

Accelerate Productivity & Team Engagement

• Optimized store staffing model
• Clearly defined career path and enhanced training program
• Aligned compensation

Investments in Technology and Data-Driven Analytics to Support Strategic Initiatives

8

Monro.Forward Progress Update

Progress on Monro.Forward Initiatives Positioning Us Well to Emerge Stronger Post COVID-19 Crisis

Improve Customer Experience

Enhance Customer- Centric Engagement

Optimize Product & Service Offering

Accelerate Productivity & Team Engagement

• Completed pre-COVID plan to streamline real estate portfolio with closure of 42 underperforming stores, including six in Q4FY20 and 36 in Q1FY21
• Outperformance of rebranded stores reinforces strength of strategy
• Gradually resuming store rebrand and reimage initiative in Q2FY21
• Tightened and redirected marketing spend to higher ROI digital channels
• Substantially completed rollout of modernized store infrastructure and digital phone system to drive better customer execution
• Completed rollout of Amazon.com collaboration across entire store base, furthering broader omnichannel strategy
• Rollout of new pricing and category management technology progressing as planned
• Leveraging price elasticity analytics to dynamically respond to demand trends
• Leveraging technology-based labor model to effectively ramp up staffing in stores
• Data-drivenstore staffing and scheduling software rollout progressing as planned and expected to be completed by Q3FY21
• Utilizing Monro University to support rollout of initiatives, while continuing to facilitate career development and continuous learning opportunities

9

Store Rebrand & Reimage Initiative

Store Rebrand & Reimage Initiative is an Important Part of Our Company Transformation

Improve Customer Experience

• Our largest initiative, which focuses on creating a more consistent store appearance and implementing standardized in-store operating procedures
• Have completed the transformation of more than 200 stores in key markets, including rebranding ~70 stores from service branded stores
• Resuming store rebrand and reimage initiative with a measured and moderated approach, expect to complete ~60 to 120 stores in FY21

10

Monro.Forward: Investments in Technology

Significant Investments in Technology to Support Monro.Forward Strategy

Area	Strategic Rationale	Timing

Business Intelligence

• KPI dashboards for stores and management

•	Launched in Q4 FY18
•	Ongoing company-wide expansion

Monro University

Learning Management System

Store Network

Infrastructure Upgrade

Digital Phone and Customer Communication System

Store Staffing Model &

Scheduling System

Tire Category Management & Pricing System

Cloud-Based Car Inspection Scanning Tool

• Ensures consistent onboarding and teammate training
• Develop clear career paths
• Deliver standard operating procedure training
• Enable and support cloud based merchandising strategy
• Enable customer-facing technology
• Eliminate cost of analog phone system
• Simplify phone execution for store personnel
• Enable customer-centric call and text messaging management
• Eliminate paper-based scheduling
• Optimizes store staffing and day part scheduling
• Improves part-time scheduling capabilities
• Enterprise solution to dynamically manage pricing at the SKU level
• Partially automates optimization of tire volume/margins by providing real-time elasticity
• State of the art technology for technicians to provide industry- leading service
• Provides efficient tool for actively managing customer needs

•	Launched in Q3 FY19
• Ongoing expansion across store base
•	Substantially completed installation
	across base in Q1 FY21
•	Substantially completed installation
	across base in Q1 FY21
•	In pilot stages
• To be implemented across base by Q3
	FY21
• Installed in more than 660 stores
• To be implemented across base by Q3
	FY21
•	In pilot stages

11

Omnichannel: Amazon.com Collaboration

Collaboration With Amazon.com Supports Monro's Online Tire Retailers Installation Strategy

Expanded Amazon.com Collaboration

• Monro's tire installation services available to customers who purchase tires online from Amazon.com and select the Ship-to-Store option
• Completed the rollout of Amazon tire installation services to all of Monro's more than 1,200 locations in 32 states
• Enhances customer-centric engagement efforts and omni-channel service offerings, delivering a best-in-class customer experience and building a scalable platform for sustainable growth

12

Scalable Platform to Drive Sustainable Growth

A Scalable Business Model with Multiple Avenues for Growth

Same Store Sales Growth

• Through Monro.Forward, drive higher customer retention and acquisition rates

Acquisitions

• Create value through profitable acquisitions

Greenfield Expansion

• Continue new store openings in existing markets

• Continue to increase store density in our 32 states
• Expand geographically into attractive markets
• On average, acquisitions represent the opportunity for 10% annual sales growth
• Acquisition growth drives scale and operating margin expansion, strengthening competitive advantages

13

A Proven M&A Strategy

Monro's Acquisition Strategy Has Delivered Significant Growth Over the Years

A Proven Track Record

• 39 acquisitions in the past 8 fiscal years, adding 518 locations and $710 million in revenue
• Entered 13 new states, expanding our presence in the Southern and Western markets

▪ Average acquisition size:

• 13 stores
• ~$20 million in annualized sales growth

Recent Acquisition Activity in Fiscal 2020

• Expanded geographic footprint into the Western region with acquisitions of 51 stores and one distribution center in California, 14 stores in Nevada and four in Idaho, all new states for Monro

▪ Further solidified position in Southern markets with acquisitions of 20 stores in Lousiana, which represents a new state for Monro

• Added 10 greenfield1 locations during the year (excludes two California stores that are included above)

Fiscal 2021 Acquisition Outlook

• Temporarily suspended M&A activity during Q1FY21 due to uncertainties related to COVID-19
• Continuing to maintain a robust pipeline of opportunities and are gradually resuming M&A activity
• Continuing to evaluate attractive M&A targets that support our strategy while maintaining strong financial discipline

1Greenfield stores include new construction as well as the acquisition of one to four store operations

14

COVID-19 Response

Executing on Elements Within Our Control to Support Our Business Operations

Key		Prioritizing health &	Ensuring business	Emerging stronger post
Priorities	safety in all aspects of	continuity to serve our	COVID-19 crisis
our business	customers
			Operations Update	Financial Update
	▪ Enhanced cleaning and safety protocols to promote	▪ Maximizing financial flexibility to support business
		the well-being of our teammates and customers	operations
	▪ Stores gradually returning to normalized hours of	▪ Operating on a cash flow positive basis in current
		operation to support improving demand trends	environment
	▪	Streamlining cost structure and accelerating	▪ Resuming store rebrand and reimage initiative with
		transformation initiatives to support future growth	a measured and moderated approach
	▪ Leveraging diverse supply chain	▪ Evaluating attractive M&A targets that support our
				strategy while maintaining strong financial discipline

15

First Quarter Fiscal 2021 Highlights

Navigating Uncertain Environment and Challenges Related to Ongoing COVID-19 Pandemic

Quarterly Comps Trends

5%
0%
	Q1FY20		Q2FY20		Q3FY20		Q4FY20		Q1FY21
-5%
-10%
-15%
-20%
-25%
-30%

Q1FY21

Key Highlights

• Comparable store sales of -25.8% due to significant impact of COVID-19
• As expected, April represented a low point in sales performance as government restrictions gradually abated through Q1
• Sales from new stores added $12.7M, including sales from recent acquisitions of $11.1M

Monthly Comparable Store Sales

0%

Apr-20

May-20

Jun-20

Jul-201

-10%

-20%

-30%

-40%

-50%

Q1FY21

Key Highlights

• Tires: -14%
• Alignments: -32%
• Maintenance: -35%
• Front End/Shocks: -36%
• Brakes: -41%

1Preliminary results through July 25, 2020

16

First Quarter Fiscal 2021 Results

The COVID-19 Related Drop in Traffic Significantly Impacted Our First Quarter Performance

		Q1FY21	Q1FY20
Sales (millions)		$247.1	$317.1	(22.1%)
Same Store Sales	(25.8%)	0.8%	(2,660 bps)
Gross Margin		35.4%	40.4%	(500 bps)
Operating Margin	4.6%	11.5%	(690 bps)
Diluted EPS		$.09	$.67	(86.6%)
Excluded Costs1	$.06	$.02
Adjusted Diluted EPS2		$.15	$.69	(78.3%)

1Excluded costs in Q1FY21 include $.06 per share in planned store closing costs. Excluded costs in Q1FY20 include $.01 per share of costs related to Monro.Forward initiatives and $.01 per share of costs related to acquisition due diligence and integration.
2Adjusted diluted EPS is a non-GAAP measure that excludes certain non-recurring items and items related to our Monro.Forward or acquisition initiatives. A reconciliation of net income to adjusted net income and diluted EPS to adjusted diluted EPS is included in our earnings release dated July	17
29, 2020.

First Quarter Fiscal 2021 EPS Bridge

$0.80
$0.67	($0.77)
$0.60
$0.40
$0.20	$0.45	$0.15	($0.06)
			$0.09
$0.00
	($0.20)
-$0.20
-$0.40

Q1FY20 Diluted	Impact of -25.8%	Impact of Gross	Other 1	Q1FY21 Adjusted	Planned Store	Q1FY21 Diluted
Earnings Per Share -	Comp Sales	Margin Decline		Diluted Earnings Per	Closures	Earnings Per Share -
GAAP				Share - Non-GAAP		GAAP

1Other includes net benefit of cost savings and lower expenses due to a reduction in the number of stores compared to the prior year period.

18

Maximizing Financial Flexibility

We Have Taken Proactive Measures to Operate on a Cash Flow Positive Basis During COVID-19 Pandemic

Disciplined Capital Allocation

First Quarter Fiscal 2021		Near-term Priorities
▪ Paid down $240.2M of bank debt		▪ Maintaining rigorous capital management
▪ Capex of $15.3M		▪	Bolstering working capital position
▪ Paid $7.4M in dividends		▪	Resuming store rebrand and reimage initiative
			with a measured and moderated approach
▪ Strategically realigned cost structure to protect
financial strength		▪ Evaluating attractive M&A targets that support our
			strategy while maintaining strong financial
▪ Amended covenants of revolving credit facility in			discipline
June 2020 to enhance financial flexibility
		▪	Paying quarterly dividend

19

Strong Balance Sheet and Liquidity

Healthy Balance Sheet and Ample Liquidity to Support Ongoing Business Operations

• Generated $73M of operating cash flow during Q1FY21
• Net bank debt of $179M as of June 2020
• Net debt-to-EBITDA ratio as of June 2020 of 3.86x
• Strong liquidity position of ~$400M as of July 25, 2020

20

Investment Highlights

• Leading chain of Company-operated undercar care facilities in the U.S. with a wide breadth of product and service offerings
• Strong position in Northeast, Great Lakes and Mid-Atlantic and expanding into Southern and Western markets with a presence in 32 states
• 19 years of consecutive annual sales growth
• Low cost operator with strong operating margins
• Well-positionedto capitalize on a favorable industry backdrop
• Monro.Forward strategy creating a scalable platform to drive sustainable growth, with a focus on operational excellence to increase overall customer lifetime value
• Significant growth opportunity to execute disciplined acquisition strategy in a highly fragmented industry
• Strong balance sheet and cash flow
• Delivering consistent shareholder returns through dividend program

21

Appendix

22

Fiscal 2021 Outlook - Financial Assumptions

Financial Assumptions as of July 29, 2020

Additional Assumptions

Tire and Oil Costs

Interest Expense

Depreciation and Amortization

Tax Rate

Capital Expenditures

Weighted Average Number of Diluted Shares Outstanding

Store Closure Operating Income Benefit

Cost Reductions

Stable to slight decrease y/y

~$28M to ~$30M

~$74M to ~$80M

~24%

~$30M to ~$50M

~34M

~$3.8M

~$20M to ~$25M

• Capex range accounts for rebrand of ~60 to ~120 stores as we resume this initiative with a measured pace
• Realized ~$15M in cost savings in Q1 and expect additional savings of ~$5M to ~$10M through the remainder of FY21
• Anticipate lower cost savings in Q2 when redirecting portion of marketing spend to enhance recruiting initiatives

23

Store Refresh Transformation Timeline

7 Stage Transformation Process from Beginning to End Takes ~17 Weeks

BEFORE	AFTER

Store Readiness	Parts Inventory	Store Inventory Storage	Inventory Assortment	Store Team Trained	Store Interior Remodel	Store Exterior Painted
on New Operating	and Technology	and New Signage
for Change	Rebalanced1	Configured for Tires1	Reset for Tire Focus1
Procedures	Installed	Installed

1Steps are only required for stores that are being rebranded from service format to tire format

~17 WEEKS

24

Monro.Forward Strategic Initiatives

FY19

Improve Customer

Experience

Enhance

Customer-Centric

Engagement

Optimize Product

& Service Offering

Accelerate

Productivity

• Team Engagement

Foundational

Technology &

Tools

Q2 FY19	Q3 FY19	Q4 FY19	FY20	Q2 FY20	Q3 FY20	Q4 FY20	FY21	Q2FY21
		Pilot store refresh &		Scale store refresh & operational
		operational excellence		excellence
		Scheduled maintenance
		in-store selling
	Data-driven CRM		Digital phone and customer
			communication system
	New websites	Data-driven "new customer"
		marketing
New in-store sales			Optimize tire assortment
packages

New store comp plans	Monro University (includes
career path, LMS)

Store staffing & scheduling system

Store network infrastructure upgrade

Tire category management & pricing system

Cloud based car inspection tool

= Completed Initiatives	25