Siteone Landscape Supply, Inc. · NYSE:SITE
Siteone Landscape Supply — Q3 2017 Earnings Presentation
18 slides from Siteone Landscape Supply's earnings presentation, 2017
Slide 1: Third Quarter 2017 Earnings
7 ~ 4 SiteOne™ LANDSCAPE SUPPLY Stronger Together Third Quarter 2017 Earnings
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 2017 Adjusted EBITDA outlook. S
Slide 3: Conference call agenda
Conference call agenda Introduction Pascal Convers, EVP S&D and IR Business Update Doug Black, Chairman and CEO Financial Update John Guthrie, CFO Development Update Pascal Convers, EVP S&D and IR 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 ■ Large $17 billion highly fragmented market ■ More than four times the size of next competitor and only 10% market share(1) ■ Serving residential and commercial landscape professionals ■ Complement
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: Third Quarter 2017 highlights and recent developments
Third Quarter 2017 highlights and recent developments Third Quarter 2017 highlights: Grew net sales 13% to $502.4 million, despite headwinds caused by hurricanes Harvey & Irma Organic Daily Sales increased by 5%; growth from acquisitions was 8% Gross profit increased 16% to $160.3 million; gro
Slide 7: Review of Third Quarter 2017 financial results
Review of Third Quarter 2017 financial results Summary financials Financial highlights ($ in millions) ■ Net sales increased 13% YoY to $502.4 million – Organic Daily Sales increased 5%, despite the Net sales 444.5 502.4 hurricane headwinds – Acquisitions contributed $34.1 million to growth, or 8% Q
Slide 8: Review of Third Quarter 2017 balance sheet & cash flow highlights
Review of Third Quarter 2017 balance sheet & cash flow highlights Third Quarter 2017 Balance sheet & cash flow highlights ($ in millions) ■ Working Capital increased 12% YoY to $428.7 million – The increase reflects higher inventory levels due to acquisitions, product line expansion and supply chain
Slide 9: Robust track record of acquisitions
Robust track record of acquisitions 2014 2015 2016 2017 YTD # Acquisitions 4 4 6 8 Annualized sales1 ~$40M ~$230M ~$150M ~$130M # branches added 18 50 29 26 Target Locations Strategic rationale Loma Vista 2 locations in MO & KS #1 nursery position in the Kansas City metro East Haven 1 location in CT
Slide 10: M&A strategy continues to gain momentum
M&A strategy continues to gain momentum South Coast Supply Marshall Stone Roanoke, VA SiteOne existing Marshall Stone Los Angeles, CA Triad Region, NC SiteOne existing South Coast Supply Closed in August 2017 Closed in September 2017 Leading hardscapes position in Orange County Leading hards
Slide 11: M&A strategy continues to gain momentum
M&A strategy continues to gain momentum Harmony Gardens Ft. Collins Closed in October 2017 Leading nursery position in Colorado Allows for full product line offering to local customers Cross-sell SiteOne full suite of products Purchasing synergies Denver SiteOne existing Harmony Gardens Co
Slide 12: Robust pipeline provides significant growth opportunity
Robust pipeline provides significant growth opportunity SiteOne is the leading industry consolidator 10% Significant sourcing advantage with 60+ associates scouting 90% Our pipeline is deep and rapidly expanding ~$15bn(1) opportunity M&A team in place to execute larger pipeline Acquisition
Slide 13: SiteOne's 2017 outlook
SiteOne’s 2017 outlook Underlying market trends remain positive Market share gains expected to continue Continued gross margin expansion SG&A as % of net sales expected to be slightly higher than 2016 M&A activity continues to gain momentum from a robust pipeline 2017 Adjusted EBITDA exp
Slide 14: Investment highlights
Investment highlights Uniquely Clear market leader attractive industry Compelling and Proven management sustainable team growth strategy Operational and Value-creating commercial acquisitions excellence 14
Slide 15: Appendix
Appendix Non-GAAP Reconciliations
Slide 16: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation Three Months Ended Nine Months Ended ($ in millions) October 1, 2017 October 2, 2016 October 1, 2017 October 2, 2016 Net income $16.9 $ 14.9 $50.6 $36.2 Income tax expense 10.7 10.7 29.4 25.4 Interest expense, net 6.2 6.3 19.0 15.4 Depreciation
Slide 17: Non-GAAP reconciliations
Non-GAAP reconciliations Organic Daily Sales Reconciliation 2017 2016 ($ in millions) Q3 ‘17 Q2 ‘17 Q1 ‘17 Q3 ‘16 Q2 ‘16 Q1 ‘16 Net Sales $502.4 $608.6 $335.0 $444.5 $513.4 $328.5 Organic Sales 457.4 548.1 318.5 433.6 506.6 328.5 A Acquired Sales 45.0 60.5 16.5 10.9 6.8 -- Selling Days (#) 63 64 64
Slide 18: Accelerating performance and growth led by recent transformation
Accelerating performance and growth led by recent transformation 2005 2016 (May) 2013 (Q4) 2017 (May) Acquired UGM Initial public offering CD&R acquired Follow-on secondary 60% of JDL Strategy 2016 (Nov/Dec) 2017 (July) & Brand Development Debt re-pricing & secondary Follow-on secondary 2007 2014 20
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