Siteone Landscape Supply, Inc. · NYSE:SITE
Siteone Landscape Supply — Q3 2023 Earnings Presentation
24 slides from Siteone Landscape Supply's earnings presentation, Nov 1, 2023
Slide 1: Third Quarter 2023 Earnings
SiteOne”™ LANDSCAPE SUPPLY Stronger Together Third Quarter 2023 Earnings
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our 2022 Adjusted EBITDA outlook and our sh
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 full product line wholesale distributor of landscape supplies ■ $25 billion highly fragmented market(1) ■ More than four times the size of next competitor and only ~16% market share(1) ■ Serving residential and commercial landscape profession
Slide 5: SiteOne is built for continued growth and margin enhancement
SiteOne is built for continued growth and margin enhancement Current strategy ✓ Leverage strengths of both large and local company ■ Fully exploit our scale, resources and capabilities ■ Execute local market growth strategies ■ Deliver superior value to our customers and suppliers ■ Close and integr
Slide 6: Track record of performance and growth
Track record of performance and growth Net Sales Adjusted EBITDA ($ in Millions) ($ in Millions) $464 $4,015 ’16-’22 $415 ’16-’22 $3,476 Growth Growth $2,705 35.4% $2,358 34.9% Sales $ $260 Adj. EBITDA $ $2,112 +144% 11.9% 11.6% $1,862 33.3% $201 +246% $1,648 $176 32.8% $157 GM % $134 Adj. EBITDA %
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 ~55 product lines in only ~21% of our target markets today… ~70 ~65 ~50 (1) Target markets as of Q4 2022 ar
Slide 8: Third Quarter 2023 highlights
Third Quarter 2023 highlights Third Quarter 2023 highlights (compared to Third Quarter 2022): ✓ Net sales increased 4% to $1.15 billion ✓ Organic Daily Sales decreased 2% ✓ Gross profit of $388.1 million was largely unchanged; gross margin contracted 130 basis points to 33.9% ✓ SG&A as a percentage
Slide 9: Review of Third Quarter 2023 financial results
Review of Third Quarter 2023 financial results Summary financials Financial highlights (compared to prior-year period) (in millions) +4% ■ Net sales increased 4% YoY to $1.15 Billion – Organic Daily Sales decreased 2% due to price deflation for $1,145.1 Net sales commodity products such as PVC pipe,
Slide 10: Balance sheet & cash flow highlights
Balance sheet & cash flow highlights For the quarter ended Oct 1, 2023 Balance sheet & cash flow highlights (compared to prior-year period) (in millions) ■ Working capital increased to $918.8 million, compared to $869.2 million – Increase reflects higher receivables supporting sales growth and Worki
Slide 11: Proven track record of successful acquisitions
Proven track record of successful acquisitions 2014-2018 2019 2020 2021 2022 2023 Total ▪ Cutting Edge ▪ Wittkopf Landscape ▪ Lucky Landscape ▪ JK Enterprise ▪ J&J Materials Supplies ▪ All Pro Horticulture ▪ Arizona Stone & ▪ BellStone Masonry ▪ Triangle Landscape ▪ Empire Supplies Solstice Supplies
Slide 12: M&A continues to add significant value: Hickory Hill Farm & Garden
M&A continues to add significant value Hickory Hill Farm & Garden SiteOne ✓ Closed on July 3rd Hickory Hill ✓ Expands our leading irrigation, nursery, and landscape supplies presence in the Lake Oconee area ✓ Cross-selling synergies ✓ Purchasing synergies Source: Company data 12
Slide 13: M&A continues to add significant value: New England Silica
M&A continues to add significant value New England Silica ✓ Closed on August 11th ✓ Expands our leading hardscapes presence in the Connecticut market ✓ Purchasing synergies ✓ Cross-selling synergies SiteOne New England Silica Source: Company data 13
Slide 14: M&A continues to add significant value: Timothy's Center for Gardening
M&A continues to add significant value Timothy’s Center for Gardening ✓ Closed on August 25th ✓ Extends our leading hardscapes, landscape supplies, & nursery presence in New Jersey and the Delaware Valley ✓ Purchasing synergies ✓ Cross-selling synergies SiteOne Timothy’s Source: Company data 14
Slide 15: M&A continues to add significant value: Pioneer Landscape Centers
M&A continues to add significant value Pioneer Landscape Centers Colorado Arizona ✓ Closed on August 25th ✓ Establishes SiteOne as the #1 bulk landscape supplies distributor in Colorado and Arizona ✓ Adds 34 branches to our existing network ✓ Purchasing synergies ✓ Cross-selling synergies SiteOne Pi
Slide 16: M&A continues to add significant value: Regal Chemical
M&A continues to add significant value Regal Chemical ✓ Closed on August 25th ✓ Expands our portfolio of agronomics products & services in the Southeast ✓ Purchasing synergies ✓ Cross-selling synergies SiteOne Regal Source: Company data 16
Slide 17: M&A continues to add significant value: JMJ Organics
M&A continues to add significant value JMJ Organics ✓ Closed on August 28th ✓ Extends our leading landscape supplies & nursery presence in Houston ✓ Purchasing synergies ✓ Cross-selling synergies SiteOne JMJ Organics Source: Company data 17
Slide 18: Robust pipeline provides significant growth opportunity
Robust pipeline provides significant growth opportunity ✓ SiteOne is the leading industry consolidator 16% ✓ Significant sourcing advantage with 80+ associates scouting new growth opportunities 84% ✓ Our pipeline is deep and expanding ~$25bn market(1) ✓ Experienced M&A team driving strong acquisitio
Slide 19: 2023 Outlook
2023 Outlook ✓ End market demand expected to remain resilient ✓ Commodity price deflation expected to continue for the remainder of the year ✓ Key commercial and operational initiatives expected to support market share gains and positive sales volume growth ✓ Organic Daily Sales growth expected to b
Slide 20: Investment highlights
Investment highlights Uniquely Clear market leader attractive industry Compelling and Proven management sustainable team growth strategy Operational and Value-creating commercial acquisitions excellence 20
Slide 21: Appendix: Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations
Slide 22: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation 2023 2022 2021 ($ in millions) Q3’23 Q2’23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 Q4’21 Reported Net income (loss) $57.3 $124.0 $(4.5) $(0.9) $73.3 $140.7 $32.3 $27.5 Income tax (benefit) expense 17.5 40.0 (2.7) (4.6) 22.9 44.8 4.6 2.7 Interest expense,
Slide 23: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation ($ in millions) 2022 2021 2020 2019 2018 2017 2016 Reported Net income $245.4 $238.4 $121.3 $77.7 $73.9 $54.6 $30.6 Income tax expense 67.7 56.1 27.5 13.8 1.3 18.0 21.3 Interest expense, net 20.0 19.2 31.0 33.4 32.1 25.2 22.1 Depreciation & amo
Slide 24: Non-GAAP reconciliations
Non-GAAP reconciliations 2023 Organic Daily Sales Reconciliation 2023 2022 ($ in millions) FY’23 Q4’23 Q3’23 Q2’23 Q1’23 FY’22 Q4’22 Q3’22 Q2’22 Q1’22 Reported Net Sales -- -- $1,145.1 $1,353.7 $837.4 $4,014.5 $890.0 $1,102.6 $1,216.6 $805.3 A Organic Sales -- -- $1,046.7 $1,252.4 $777.6 $3,929.3 $8
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