Siteone Landscape Supply, Inc. · NYSE:SITE
Siteone Landscape Supply — Q4 2019 Earnings Presentation
24 slides from Siteone Landscape Supply's earnings presentation, Feb 18, 2020
Slide 1: Fourth Quarter 2019 Earnings
Fourth Quarter 2019 Earnings February 18, 2020
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our 2020 Adjusted EBITDA outlook. S
Slide 3: Conference call agenda
Conference call agenda Introduction John Guthrie, CFO Business Update Doug Black, Chairman and CEO Financial Update John Guthrie, CFO Development Update Scott Salmon, EVP Strategy & Development Closing & Outlook Doug Black, Chairman and CEO Q&A 3
Slide 4: Company and industry overview
Company and industry overview ■ Largest and only national wholesale distributor of landscape supplies ■ $20 billion highly fragmented market(1) ■ More than four times the size of next competitor and only ~12% market share(1) ■ Serving residential and commercial landscape professionals Distribution C
Slide 5: SiteOne is poised for long-term growth and margin enhancement
SiteOne is poised for long-term growth and margin enhancement Current strategy Leverage strengths of both large and local company ■ Fully exploit our scale, resources and capabilities ■ Execute local market growth strategies ■ Deliver superior value to our customers and suppliers ■ Close and integ
Slide 6: Track record of performance and growth
Track record of performance and growth Net Sales Adjusted EBITDA (in Millions) (in Millions) 2,358 201 2,112 ’14-’19 176 ’14-’19 1,862 1,648 Growth 157 Growth 1,452 134 Sales $ 107 Adj. EBITDA $ 1,177 32.1% 32.8% 32.0% +100% +172% 31.3% 74 29.6% 8.4% 8.5% GM % 8.1% 8.3% Adj. EBITDA % 26.4% 7.3% +640
Slide 7: Significant room to grow across product lines
Significant room to grow across product lines # of markets (1) Missing either Missing both Full Product No Hardscapes or Hardscapes Line Offering Presence Nursery and Nursery SiteOne offers all ~50 product lines in only ~21% of our target markets today… ~80 ~50 ~50 (1) Target markets as of 2019 are
Slide 8: Fiscal Year 2019 highlights and recent developments
Fiscal Year 2019 highlights and recent developments Fiscal Year 2019 highlights: Net sales increased 12% to $2.36 billion Organic Daily Sales increased 5% Gross profit increased 14% to $773.2 million; gross margin improved 70 bps to 32.8% Net income increased 5% to $77.7 million Adjusted E
Slide 9: Fiscal Year 2019 and Fourth Quarter 2019 financial results
Fiscal Year 2019 and Fourth Quarter 2019 financial results Financial performance Fiscal Year 2019 highlights Net Income ($M) Net income for the year increased 5% to $77.7 +5% million, compared to $73.9 million in 2018 77.7 80 70 73.9 Adjusted EBITDA increased 14% to $201.1 million, 60 compared t
Slide 10: Balance sheet & cash flow highlights
Balance sheet & cash flow highlights For the year ended December 29, 2019 Balance sheet & cash flow highlights ($ in millions) ■ Working capital decreased to $455.0 million, compared to $483.0 million in the prior-year period – Excluding lease accounting change, working capital would have increased
Slide 11: Proven track record of successful acquisitions
Proven track record of successful acquisitions 2014 – 2015 2016 2017 2018 2019 2020 YTD Total Eljay Hydro- Aspen Valley Pete Rose Cutting Edge Wittkopf Scape Landscape Diamond Head Stone Forest Atlantic Irrigation All Pro Supplies Blue Max Horticulture Stockyard Angelo's
Slide 12: M&A continues to add significant value
M&A continues to add significant value Design Outdoor Reno Closed on September 30, 2019 Establishes a leading hardscapes platform in a new MSA (Reno/Lake Tahoe) Cross-sell opportunities Purchasing synergies SiteOne Design Outdoor Source: Company data 12
Slide 13: M&A continues to add significant value
M&A continues to add significant value Dirt Doctors Closed on December 20, 2019 Industry-leading bulk and bagged landscape supplies platform with three locations in the greater New England market Cross-sell opportunities Purchasing synergies SiteOne Dirt Doctors Source: Company data 13
Slide 14: M&A continues to add significant value
M&A continues to add significant value Daniel Stone Closed on December 27, 2019 Provides a hardscapes platform in the Austin market Completes full product line in this high growth MSA Cross-sell opportunities Purchasing synergies SiteOne Daniel Stone Source: Company data 14
Slide 15: M&A continues to add significant value
M&A continues to add significant value Wittkopf Landscape Supplies Closed on January 2, 2020 Two locations in the greater Spokane, Washington Spokane Valley market Provides hardscapes and landscaping products platform in Spokane Completes full product line offering in Spokane Cross-sell op
Slide 16: M&A continues to add significant value
M&A continues to add significant value Empire Supplies Closed on January 7, 2020 SiteOne Establishes a leading hardscapes and landscaping Empire Supplies products platform with three locations in the greater Newark-Union, New Jersey market Cross-sell opportunities Purchasing synergies Source
Slide 17: M&A continues to add significant value
M&A continues to add significant value Garden Dept. Closed on January 14, 2020 Expands our leading nursery and landscaping products position, adding three locations on Long Island, NY Cross-sell opportunities Purchasing synergies SiteOne The Garden Dept. Source: Company data 17
Slide 18: Robust pipeline provides significant growth opportunity
Robust pipeline provides significant growth opportunity SiteOne is the leading industry consolidator 12% Significant sourcing advantage with 80+ associates scouting new growth opportunities 88% Our pipeline is deep and expanding ~$20bn market(1) M&A team in place to execute our acquisition s
Slide 19: 2020 outlook
2020 outlook Underlying market trends remain positive Market share gains expected to continue Expect a more stable pricing environment compared to 2019 Expect additional M&A activity from a strong pipeline 2020 Adjusted EBITDA expectation of $213 million to $228 million, representing year-
Slide 20: Investment highlights
Investment highlights Uniquely Clear market leader attractive industry Compelling and Proven management sustainable team growth strategy Operational and Value-creating commercial acquisitions excellence 20
Slide 21: Appendix
Appendix Non-GAAP Reconciliations
Slide 22: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation 2019 2018 ($ in millions) Q4’19 Q3’19 Q2’19 Q1’19 Q4’18 Q3 ‘18 Q2 ‘18 Q1 ‘18 Net income (loss) $2.5 $34.6 $64.7 $(24.1) $(2.1) $29.9 $63.1 $(17.0) Income tax expense (benefit) (5.6) 9.7 19.3 (9.6) (5.6) 2.4 14.7 (10.2) Interest expense, net 7.5
Slide 23: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation ($ in millions) 2019 2018 2017 2016 2015 Net income $77.7 $73.9 $54.6 $30.6 $28.9 Income tax expense 13.8 1.3 18.0 21.3 19.5 Interest expense, net 33.4 32.1 25.2 22.1 11.4 Depreciation & amortization 59.5 52.3 43.1 37.0 31.2 EBITDA $184.4 $159.
Slide 24: Non-GAAP reconciliations
Non-GAAP reconciliations 2019 Organic Daily Sales Reconciliation 2019 2018 ($ in millions) FY’19 Q4’19 Q3’19 Q2’19 Q1’19 FY’18 Q4’18 Q3 ‘18 Q2 ‘18 Q1 ‘18 Net Sales $2,357.5 $535.0 $652.8 $752.4 $417.3 $2,112.3 $474.6 $578.5 $687.8 $371.4 A Organic Sales $2,077.1 $469.3 $570.4 $660.1 $377.3 $1,983.4
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