Gms Group Co., Ltd. · TSE:544A
Gms — Investor Presentation (September 2024)
33 slides from Gms's investor presentation, Sep 4, 2024
Slide 1: Investor Overview September 2024
Investor Overview September 2024
Slide 2: Safe Harbor and Basis of Presentation
2 Safe Harbor and B asis of Presentation Forward - Looking Statement Safe Harbor — This presentation includes “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify forward - looking statements by the Company’s use of for
Slide 3: GMS at a Glance
3 Fiscal 2022 Net Sales 53 yrs FY24 Net Sales $ 5.5 B 300+ Distribution yards GMS at a Glance 7,600+ GMS Team Members NYSE Ticker Symbol GMS & ~100 Tool Sales, Rentals & Service Centers 1. For a reconciliation of Adjusted EBITDA to the most directly comparable GAAP metrics, see Appendix. FY24 Net In
Slide 4: Diversified and Balanced End Market Exposure
4 Diversified and Balanced End Market Exposure Diversified exposure across commercial and residential new and repair and remodel construction markets continues to be an advantage Residential • Single - Family New • Multi - Family New • Repair & Remodel ~45% Commercial • New Construction • Repair & R
Slide 5: Providing Value to Contractors and Builders
5 Providing Value to Contractors and Builders GMS provides a complementary and complete product offering with value - added service delivery to the contractor s who install wallboard, ceilings, steel framing and ancillary products needed to complete the job 1 Complementary products consists of Tools
Slide 6: Local Go-To-Market Strategy with Scale Benefits
6 Local Go - To - Market Strategy with Scale Benefits GMS distribution locations USA and Canada GMS’s model provides for the intimacy of a local business, exceptional customized service and an entrepreneurial culture while leveraging North American economy of scale • Combines the benefits of a local
Slide 7: Strategic Growth Priorities
7 Strategic Growth Priorities Capitalize on existing fixed investments in locations & equipment where we are underpenetrated or below expected share Grow Complementary Product opportunities to diversify and profitably expand our product offerings Expand the platform through accretive acquisition and
Slide 8: Continuing to Diversify and Profitably Expand Offerings
8 20% 19% 16% 45% 30% 13% 16% 41% Continuing to Diversify and Profitably Expand Offerings Successfully Growing Complementary Products Complementary Products 2014 Net Sales: $1.4B NET SALES BREAKDOWN (FISCAL 2014) 2024 Net Sales: $5.5B NET SALES BREAKDOWN (FISCAL 2024) Complementary Products Ceilings
Slide 9: Recent Platform Expansion Activities
9 Recent Platform Expansion Activities Strengthen Core and Complementary Product Offerings • Acquisition Date: March 1, 2024; Annual revenue: ~$235 million (for calendar 2023) • Expands GMS’s share in our core products and provides geographic expansion in the highly - strategic New York City market
Slide 10: Opportunities for Further Platform Expansion
10 Opportunities for Further Platform Expansion • Opportunity to expand our geographic footprint in under - served and under - penetrated markets through accretive greenfield locations and acquisitions • Current footprint comprises over 300 distribution yard locations covering 47 U.S. States and 6 C
Slide 11: Attractive Capital Structure Supports Strategic Priorities
11 Attractive Capital Structure Supports Strategic Priorities • Repurchased 538K shares for $46.2 million during Q125 • $154.3 million of repurchase authorization remaining 1.5x 1.5x 1.5x 1.7x 2.1x 07/31/2023 10/31/2023 01/31/2024 04/30/2024 7/31/2024 $40 $49 $44 $397 $27 $834 FY25 FY26 FY27 FY28 FY
Slide 12: Solid Track Record of Profitability and Cash Flow
12 GMS – Solid Track Record of Profitability and Cash Flow *For a reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin or Free Cash Flow to the most directly comparable GAAP metri cs, see Appendix $3,299 $4,635 $5,329 $5,502 $5,541 9.7% 12.2% 12.5% 11.2% 10.6% FY-21 FY-22 FY-23 FY-24 LTM-Q125 N
Slide 13: Well Positioned to Deliver Long Term Value
13 Well Positioned to Deliver Long Term Value
Slide 14: Financial Update Q1 FY2025
14 Financial Update Q1 FY2025
Slide 15: Q1 Fiscal 2025 At a Glance
15 Wallboard 41% Ceilings 14% Steel Framing 14% Complementary Products 31% Q1 Fiscal 2025 At a Glance Comparisons are to Q 1 FY2 4 • Volume growth across all four major product categories, inclusive of acquisitions • Resilient or improved pricing in Wallboard, Ceilings and Complementary Products • P
Slide 16: Strategic Growth Priorities – Q1 FY25 Update
16 Drive Improved Productivity & Profitability Strategic Growth Priorities – Q1 FY25 Update Capitalize on existing fixed investments in locations & equipment where we are underpenetrated or below expected share Grow Complementary Product opportunities to diversify and profitably expand our product o
Slide 17: Sales Highlights – Q1 FY25
17 Sales Highlights – Q1 FY25 U.S. Per Day Residential Sales Q125 Net Sales $ 1.4 B Per Day Net Sales 2.1% U.S. Per Day Commercial Sales 1.7% 2.7% 2.8% • Single - family demand was up YOY for second consecutive quarter • Commercial and multi - family activity levels slowed more than expected for the
Slide 18: Shifts in Price Realization and Demand Mix Impacted Profitability
18 $450.6 $451.6 32.0% 31.2% 30.0% 30.5% 31.0% 31.5% 32.0% 32.5% 33.0% 33.5% $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 Fiscal Q1 2024 Fiscal Q1 2025 Gross Profit Gross Margin ($ mm) Shifts in Price Realization and Demand Mix Impacted Profitability * For a reconciliation of Adjusted SG&A, A
Slide 19: End Market & Product-Level Expectations
19 End Market & Product - Level Expectations Product Category Q2 FY25 YOY Volume Expectations Q2 FY25 YOY Price/Mix Expectations Organic Total (Incl. acquisitions) •Single - family: Up mid - single digits •Multi - family: Down low - double digits •Commercial: Down high - single digits Total Wallboar
Slide 20: Consolidated Expectations
20 Consolidated Expectations Metric for Q2 FY25 Q2 FY25 Expectation Net Sales Up low - to - mid single digits YOY Gross Margin ~31.6% - 31.8% Net Income $67 million - $69 million Adjusted EBITDA 1 $163 million - $168 million Adjusted EBITDA Margin 1 Approximately 11% Metric for Full Year FY25 Full Y
Slide 21: Appendix
21 Appendix
Slide 22: Summary Quarterly Financials
22 Summary Quarterly Financials (In millions) 1Q24 2Q24 3Q24 4Q24 FY24 1Q25 (Unaudited) Wallboard Volume (MSF) 1,204 1,231 1,101 1,234 4,769 1,233 Wallboard Price ($ / '000 Sq. Ft.) 475$ 476$ 473$ 475$ 475$ 477$ Wallboard 571$ 585$ 521$ 586$ 2,263$ 588$ Ceilings 175 175 156 189 695 207 Steel framing
Slide 23: Quarterly Cash Flows
23 Quarterly Cash Flows (1) Free cash flow is a non - GAAP financial measure defined as net cash provided by (used in) operations less capital expenditures. D ifferences may occur due to rounding. ($ in millions) (Unaudited) 1Q24 2Q24 3Q24 4Q24 FY24 1Q25 Net income $ 86.8 $ 81.0 $ 51.9 $ 56.4 $ 276.
Slide 24: Q1 2025 Net Sales
24 Q1 2025 Net Sales 1. Organic net sales growth calculation excludes net sales of acquired businesses until first anniversary of acquisition date an d i mpact of foreign currency translation. ($ in millions) (Unaudited) FY25 FY24 Reported Organic (1) Organic (1) 1,378.0$ 1,409.6$ Acquisitions 75.5
Slide 25: Quarterly Net Income to Adjusted EBITDA Reconciliation
25 Quarterly Net Income to Adjusted EBITDA Reconciliation Commentary A. Represents changes in the fair value of stock appreciation rights B. Represents changes in the fair value of noncontrolling interests C. Represents non - cash equity - based compensation expense related to the issuance of share
Slide 26: Net Income to Pro Forma Adjusted EBITDA Reconciliation
26 Net Income to Pro Forma Adjusted EBITDA Reconciliation Commentary A. Represents changes in the fair value of stock appreciation rights B. Represents changes in the fair value of noncontrolling interests C. Represents non - cash equity - based compensation expense related to the issuance of share
Slide 27: Income Before Taxes to Adjusted Net Income - Legacy
27 Income Before Taxes to Adjusted Net Income - Legacy Reconciliation Commentary A. Depreciation and amortization from the increase in value of certain long - term assets associated with the April 1, 2014 acquisition of the predecessor company and amortization of intangible assets from the acquisiti
Slide 28: Income Before Taxes to Adjusted Net Income – New as of 1Q25
28 Income Before Taxes to Adjusted Net Income – New as of 1Q25 Reconciliation Commentary A. Represents all non - cash amortization resulting from business combinations. To make the financial presentation more consistent with other public building products companies, beginning in the first quarter 20
Slide 29: Income Before Taxes to Adjusted Net Income – Historical FY24
29 Income Before Taxes to Adjusted Net Income – Historical FY24 Reconciliation Commentary A. Represents all non - cash amortization resulting from business combinations B. Normalized cash tax rate excluding the impact of acquisition accounting and certain other deferred tax amounts ($ in 000s) 1Q24
Slide 30: Reported SG&A to Adjusted SG&A Reconciliation
30 Reported SG&A to Adjusted SG&A Reconciliation Commentary A. Represents changes in the fair value of stock appreciation rights B. Represents changes in the fair value of noncontrolling interests C. Represents non - cash equity - based compensation expense related to the issuance of share - based a
Slide 31: Leverage Summary
31 Leverage Summary (1) Net of unamortized discount of $2.5mm, $2.4mm, $2.3mm, $2.0mm and $1.9mm as of July 31, 2023, October 31, 2023, January 31, 2 024 , April 2024 and July 31, 2024, respectively. (2) Net of deferred financing costs of $4.1mm, $3.9mm, $3.8mm, $4.4mm and $4.3mm as of July 31, 2023
Slide 32: Reconciliation of Cash Provided by Operating Activities to Free Cash Flow
32 Reconciliation of Cash Provided by Operating Activities to Free Cash Flow
Slide 33: Net Income to Adjusted EBITDA Outlook Reconciliation
33 Net Income to Adjusted EBITDA Outlook Reconciliation Q2 FY25 Net Income $67 - $69 Interest expense, net 20.8 - 21.4 Write-off of debt discount and deferred financing fees - Provision for income taxes 25.0 - 25.7 Depreciation and amortization expense 39.1 - 40.3 Other Adjustments 12.0 Adjusted EBI