Gms Group Co., Ltd. · TSE:544A
Gms — Investor Presentation (September 2017)
31 slides from Gms's investor presentation, Sep 13, 2017
Slide 1: Safe Harbor and Basis of Presentation
Safe Harbor and Basis 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. All of these forward-looking statements are based on estimates and assumptions made by our
Slide 2: GMS at a Glance
GMS at a Glance #1 North American specialty distributor of interior construction products (1) More than 205 branches across 42 states 14.6% market share in wallboard 16.7% market share in ceilings Other 23% Residential ~40% Steel Framing 16% Balanced mix of commercial new construction, commercial R&
Slide 3: National Platform With Local Presence And Independent Brands
National Platform With Local Presence And Independent Brands GMS has an integrated national platform, but operates through over 50 local brands that are highly regarded in their markets Branch managers are empowered and incentivized to run operations like entrepreneurs within parameters of the overa
Slide 4: Product Overview
Product Overview Primarily consists of complementary interior construction products, including joint compound, finishing materials, tools and fasteners, safety products and EIFS (exterior insulation and finishing system) #1 Market Position Suspended ceiling systems primarily comprised of mineral fib
Slide 5: A One-Stop-Shop for the Interior Contractor
A One-Stop-Shop for the Interior Contractor GMS Serves as a Critical Link Between Suppliers and a Highly Fragmented Customer Base - Specialty wallboard distributors lead the wallboard distribution channel with ~65% - Specialty distributors account for ~90% of ceilings distribution channel Steel Fram
Slide 6: Highly Attractive Industry Structure
Highly Attractive Industry Structure Number of U.S. suppliers declined from 12 in late 1990s to 7 today The top 4 represent ~76% of the market (1) Highly consolidated supplier base(2) Average price increase of ~3% annually since 2007 (3) GMS maintains a strong, long-standing relationship with the su
Slide 7: Leading Specialty Distributor Poised for Continued Growth
Leading Specialty Distributor Poised for Continued Growth Market Leader with Significant Scale Advantages – #1 North American Distributor of Wallboard and Ceilings Differentiated Service Model Drives Market Leadership Multiple Levers to Drive Above-Market Growth – Market Share, Greenfields, M&A, Ope
Slide 8: Market Leader with Scale Advantages
Market Leader with Scale Advantages Market Leader with Significant Scale Advantages – #1 North American Distributor of Wallboard and Ceilings Differentiated Service Model Drives Market Leadership Multiple Levers to Drive Above-Market Growth – Market Share, Greenfields, M&A, Operating Leverage Capita
Slide 9: Differentiated Service Model Drives Market Leadership
Differentiated Service Model Drives Market Leadership reaching the end customer support, expertise, and sourcing entiated Weight And Delivery Requirements ce Model execution technology and equipment 10 Logistics Execution is Critical Given Reputation for best-in-class delivery Strong processes, sequ
Slide 10: Best-in-Class Delivery Execution Drives Margin
Best-in-Class Delivery Execution Drives Margin Distributing wallboard requires a high degree of logistics and service expertise due to: - Product characteristics: High weight to value ratio, easily damaged and cannot be left outside - Delivery requirements: Typically delivered with special equipment
Slide 11: Multiple Levers to Drive Growth
Multiple Levers to Drive Growth Continued Market Share Gains Greenfield Branch Openings Capitalize on “Other Products” Category Growth Opportunities $199 $198 CAGR: 41.1% $8 Strategic Acquisition Opportunities in Highly Fragmented Market Expanding in New and Existing Markets to Enhance Strategic Cap
Slide 12: Strong History of Market Share Gains
Strong History of Market Share Gains Significant Competitive Advantages: GMS Wallboard Market Share Scale and leading market positions drive competitive advantage Breadth of product availability and access to leading brands and latest product innovations Highly trained workforce delivering different
Slide 13: Attractive Acquirer with Significant Consolidation Opportunity
Attractive Acquirer with Significant Consolidation Opportunity Industry Structure: Large, highly fragmented industry comprised of hundreds of competitors Similar business operations enable efficient integration Acquisition Quarter Rationale Three branches with LTM sales of $24.5 million Further stre
Slide 14: Significant Opportunity to Further Expand the Platform
Significant Opportunity to Further Expand the Platform GMS has a demonstrated history of successful expansion through greenfields and acquisitions GMS has limited or no presence in just under 40% of the top 100 MSAs in the U.S. Significant opportunity for share gains in new and existing markets over
Slide 15: Large Specialty Distribution Market Opportunity
Large Specialty Distribution Market Opportunity North American market for distribution of wallboard, ceilings and complementary products generated $16 billion in net sales in the twelve months ended December 31, 2016 - $13 billion served through specialty distributors; $3 billion served by big boxes
Slide 16: Significant Opportunity to Drive Earnings Growth
Significant Opportunity to Drive Earnings Growth Operating leverage on branch cost structure - Distribution network has historically supported significantly higher volumes per branch - Leads to operating leverage on the fixed costs at the branches (Wallboard volume in million square feet) 30 14% 13%
Slide 17: Capitalizing on Large and Diverse End Markets
Capitalizing on Large and Diverse End Markets Poised for Continued Growth (Billions square feet) (Seasonally Adj. starts in millions) 4.6% 1.4 1.3 3.6% 0.9 2015 2016 Long-Term Mean (1) 2015 2016 Long-Term Mean(1) 2015 2016 Long-Term Mean(2) (1) Since 1970. Private residential fixed investment as a p
Slide 18: Entrepreneurial Culture And Experienced Leadership Driving Superior Execution
Entrepreneurial Culture And Experienced Leadership Driving Superior Execution Senior management averages over 25 years in the industry and over 20 years with GMS VPs of Operations across all seven geographic divisions have 30+ years of industry experience and have worked with GMS for 25+ years on av
Slide 19: Financial Highlights
Financial Highlights Proven track record of driving consistent above market growth and share gains Above-Market Growth Ability to deliver superior service and a comprehensive product suite Well positioned to capitalize on growth in construction end markets Attractive End Market Dynamics Balanced exp
Slide 20: Q1 2018 Highlights
Q1 2018 Highlights Net sales increased 16.8% to a record $642.2 million Base business net sales up 7.8% Wallboard unit volume grew 11.8% to a record 914 million square feet Above-Market Growth Net income significantly increased 67.4% to $15.3 million, or EPS of $0.36 per share Gross profit increased
Slide 21: Attractive Capital Structure
Attractive Capital Structure Leverage of 2.9x Net Debt / LTM Pro Forma Adj. EBITDA as of 7/31/17, down from 3.4x Net Debt / LTM Pro Forma Adj. EBITDA as of 7/31/16 Substantial liquidity, with $20 million of cash and an additional $320 million undrawn on the ABL facility, as of 7/31/17 Moody’s and St
Slide 22: Appendix
Appendix 5 :4 2 / 4 1 0 /2 /6 2/ tn e m D oc u d ve
Slide 23: Summary Quarterly Financials
Summary Quarterly Financials Note: Fiscal year end April 30. 25 (In millions, except per share data) 1Q17 2Q17 3Q17 4Q17 (Unaudited) Wallboard Volume (MSF) 818 891 842 906 Wallboard Price ($ / '000 Sq. Ft.) $ 307 $ 303 $ 303 $ 311 Wallboard $ 251 $ 270 $ 255 $ 282 Ceilings 86 85 82 87 Steel framing
Slide 24: Quarterly Net Sales
Quarterly Net Sales ($ in millions) (Unaudited) Base Business (1) (2) Acquisitions (2) Total Net Sales Business Days (3) Net Sales by Business Day Base Business Branches (4) (5) Acquired Branches (5) Total Branches Note: Fiscal year end April 30. (1) When calculating our “base business” results, we
Slide 25: Quarterly Net Income to Adjusted EBITDA
Quarterly Net Income to Adjusted EBITDA Commentary A. Represents non-cash compensation expenses related to stock appreciation rights agreements B. Represents non-cash compensation expense related to changes in the fair values of noncontrolling interests C. Represents non-cash equity-based compensati
Slide 26: LTM Net Income to Pro Forma Adjusted EBITDA
LTM Net Income to Pro Forma Adjusted EBITDA Commentary ( $ in 000s) (Unaudited) 1Q18 LTM 2017 2016 2015 A. Represents non-cash compensation expenses related to stock appreciation rights agreements $ 12,564 $ (11,697) B. Net Income (Loss) $ 55,066 $ 48,886 Represents non-cash compensation expense rel
Slide 27: Net Income to Adjusted EBITDA
Net Income to Adjusted EBITDA Commentary ($ in 000s) (Unaudited) A. Represents compensation paid to certain executives who were majority owners prior to the AEA acquisition of GMS. Following the acquisition, these executives’ compensation agreements were amended and, going forward, GMS does not anti
Slide 28: Quarterly Cash Flows
Quarterly Cash Flows ($ in millions) (Unaudited) Historical 1Q17 2Q17 3Q17 4Q17 FY17 1Q18 Net income (loss) Non-cash changes Changes in primary working capital components: Trade accounts and notes receivable Inventories Accounts payable Cash provided by (used in) operating activities $ 9.2 (5.0) $ 1
Slide 29: SG&A Adjustments Table
SG&A Adjustments Table Commentary A. Represents non-cash compensation expenses related to stock appreciation rights agreements (Unaudited) ($ in millions) SG&A - Reported Adjustments Stock appreciation rights expense (benefit) Redeemable noncontrolling interests Equity-based compensation Severance a
Slide 30: www.gms.com
www.gms.com Unsaved Document / 2/6/2014 / 22:45
Slide 31: www.gms.com