Topbuild Corp. · NYSE:BLD
Topbuild — Q2 2022 Earnings Presentation
28 slides from Topbuild's earnings presentation, Aug 2, 2022
Slide 1: Second Quarter
SECOND QUARTER Robert Buck, President & CEO Rob Kuhns, CFO August 2, 2022
Slide 2: Safe Harbor
SAFE HARBOR Statements contained herein reflect our views about future periods, including our future plans and performance, constitute “forward- looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “will,” “woul
Slide 3: TopBuild Snapshot (NYSE: BLD)
TopBuild SAFE Snapshot (NYSE: BLD) HARBOR Key Stats Statements contained herein reflect our views about future periods, including our future plans Sales Breakdown and performance, constitute “forward- looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking sta
Slide 4: Business Update
BUSINESS UPDATE § Strong second quarter results • Adjusted EBITDA margins expanded at both business segments • Volume at Installation segment outpaces housing completions § Distribution International update • Financial performance ahead of expectations • Integration ahead of schedule • On track to m
Slide 5: Second Quarter Financial Highlights
SECOND QUARTER FINANCIAL HIGHLIGHTS* Adjusted § 52.7% sales increase § 30.1% gross margin, up 90 bps § 16.4% operating margin, up 80 bps § 19.0% EBITDA margin, up 100 bps Same Branch, Adjusted § 20.7% sales increase § 31.2% gross margin, up 200 bps § 17.8% operating margin, up 220 bps § 19.9% EBITDA
Slide 6: Six Month Financial Highlights
SIX MONTH FINANCIAL HIGHLIGHTS* Adjusted § 54.9% sales increase § 29.3% gross margin, up 130 bps § 15.4% operating margin, up 100 bps § 18.2% EBITDA margin, up 140 bps Same Branch, Adjusted § 19.8% sales increase § 30.4% gross margin, up 240 bps § 17.2% operating margin, up 280 bps § 19.3% EBITDA ma
Slide 7: Installation
INSTALLATION ($ in 000s) Three Months Ended Six Months Ended Comparisons are to the period ended June 30, 2022 June 30, 2022 June 30, 2021 Sales $748,968 $1,425,661 Change 23.7% 25.2% Adjusted Operating Profit* $139,935 $253,167 Change 39.5% 45.1% Adjusted Operating Margin* 18.7% 17.8% Change 210 bp
Slide 8: Specialty Distribution
SPECIALTY DISTRIBUTION ($ in 000s) Three Months Ended Six Months Ended Comparisons are to the period ended June 30, 2022 June 30, 2022 June 30, 2021 Sales $587,791 $1,131,653 Change 115.0% 115.6% Adjusted Operating Profit* $87,083 $157,745 Change 103.1% 101.5% Adjusted Operating Margin* 14.8% 13.9%
Slide 9: Capital Allocation
CAPITAL ALLOCATION § Four acquisitions completed in 2022 through 6/30 • Residential insulation • Residential insulation • Residential insulation • Residential insulation • $1.7M annual revenue • $6.5M annual revenue • $2.0M annual revenue • $5.5M annual revenue § Board approved new $200M share repur
Slide 10: Capex, Working Capital & Cash Flow
CAPEX, WORKING CAPITAL & CASH FLOW $ in 000s Six Months Ended Six Months Ended June 30, 2022 June 30, 2021 CAPEX $36,034 $28,560 Operating Cash Flow $217,697 $202,203 June 30, 2022 June 30, 2021 Cash Balance $123,869 $261,739 June 30, 2022 June 30, 2021 Working Capital % to 15.0% 9.9% TTM Sales* CAP
Slide 11: Leverage
LEVERAGE $ in millions Total Debt $1,494.1 § $430.1M available on $500M Revolver Less Cash $123.9 § Significant room under Net Debt $1,370.2 debt covenants TTM Proforma Adj. § Low-cost debt structure $815.3 EBITDA* Leverage 1.68x STRONG BALANCE SHEET…AMPLE LIQUIDITY * See Appendix for Reconciliation
Slide 12: 2022 Outlook
2022 OUTLOOK (as of August 2, 2022) SALES ADJUSTED EBITDA* $4,800M to $4,900M $860M to $900M • Low end raised by $150M • Low end raised by $50M • High end raised by $100M • High end raised by $40M PROJECTING A STRONG YEAR OF GROWTH * See Appendix for Reconciliation 12
Slide 13: Our Business Model
OUR BUSINESS MODEL Core Strengths Our Values § Unrivaled North American scale § Operational excellence focused on continuous improvement § Laser focus on core business, insulation § Greater end-market diversification to minimize cyclicality § Exceptional service and reliability § Focus on safety § O
Slide 14: A Leader in All Three End-Markets We Serve / Safety Is a Core Value
A LEADER IN ALL THREE END-MARKETS WE SERVE SAFETY IS A CORE TOTAL ADDRESSABLE VALUE MARKET of ~$16.0B SafetyMARKET is not a choice, it’s engrained in our culture andOUR SHARE MARKET SIZE OUR FOCUS expectations of conduct Incident Rate1 Zero-accident safety culture • Superior labor network ~40% Resid
Slide 15: Safety Is a Core Value
Our ESG Focus SAFETY IS A CORE VALUE ENVIRONMENTAL § Safety is not a choice, it’s engrained in our culture and expectations of • Utilize materials often made from recycled, re-used and long-lasting materials conduct Incident Rate1 • Waste minimization program § • Centralized Zero-accident safety fle
Slide 16: Our ESG Focus
Our OURESG ESG Focus FOCUS ENVIRONMENTAL ENVIRONMENTAL • § Utilize materials Utilize materials often made often madefrom recycled, from rere recycled, -used and -used long and -lasting long materials -lasting materials • § Waste Waste minimization minimization program program • § Centralized Central
Slide 17: Our Business Is Inherently Environmentally Friendly
Our ESG Focus OUR BUSINESS IS INHERENTLY ENVIRONMENTALLY FRIENDLY ENVIRONMENTAL § Insulation products • Utilize we materials install often andrecycled, made from distribute significantly re-used and long-lasting materials enhance energy • Waste efficiency minimization program • Centralized fleet man
Slide 18: Our Goals
OUR GOALS § Strive for ZERO safety incidents § Develop a diverse and inclusive workforce § Embrace change to drive continuous improvement § Build local relationships and exceed customer expectations § Create valued long-term partnerships with suppliers § Make a difference in our communities § Promot
Slide 19: Appendix
a APPENDIX
Slide 20: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION (unaudited) ($ in 000s) Trailing Twelve Three Months Ended June 30, Six Months Ended June 30, Months Ended 2022 2021 2022 2021 June 30, 2022 Net income, as reported $ 143,697 $ 90,380 $ 258,410 $ 150,222 $ 432,205 Adjustments to arrive at EBITDA, as adjusted: Interest
Slide 21: Segment Data
SEGMENT DATA (unaudited) ($ in 000s) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 Change 2021 2020 Change Installation Sales $ 748,968 $ 605,625 23.7 % $ 1,425,661 $ 1,138,378 25.2 % Operating profit, as reported $ 139,919 $ 99,066 $ 252,598 $ 172,702 Operating margin, as reported
Slide 22: Margin Reconciliation
MARGIN RECONCILIATION (unaudited) ($ in 000s) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Gross profit, as reported $ 384,097 $ 243,180 $ 715,298 $ 440,939 Gross margin, as reported 30.1 % 29.1 % 29.3 % 28.0 % Acquisition related costs — — 121 — COVID-19 pay — 122 — 592
Slide 23: Same Branch and Acquisition Metrics
SAME BRANCH AND ACQUISITION METRICS (unaudited) ($ in 000s) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net Sales Same branch $ 1,007,185 $ 834,255 $ 1,889,050 $ 1,577,053 Acquisitions (a) 267,100 — 554,153 — Total $ 1,274,285 $ 834,255 $ 2,443,203 $ 1,577,053 Gross pro
Slide 24: Same Branch and Acquisition Metrics
SAME BRANCH AND ACQUISITION METRICS (unaudited) ($ in 000s) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 EBITDA, as adjusted Same branch $ 200,667 $ 149,848 $ 365,435 $ 265,655 Acquisitions (a) 41,587 — 78,549 — Total $ 242,254 $ 149,848 $ 443,984 $ 265,655 EBITDA, as ad
Slide 25: Income Per Common Share Reconciliation
INCOME PER COMMON SHARE RECONCILIATION (unaudited) ($ in 000s except share and per common share amounts) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Income before income taxes, as reported $ 193,532 $ 122,247 $ 346,206 $ 197,747 Rationalization charges — — 473 16 Acquis
Slide 26: Acquisition Adjusted Net Sales
ACQUISITION ADJUSTED NET SALES (unaudited) ($ in 000s) Trailing Twelve 2021 2022 Months Ended Q3 Q4 Q1 Q2 June 30, 2022 Net Sales $ 845,757 $ 1,063,398 $ 1,168,918 $ 1,274,285 $ 4,352,358 † Acquisitions proforma adjustment 231,146 48,816 2,481 39 282,482 Net sales, acquisition adjusted $ 1,076,903 $
Slide 27: Reconciliation Guidance Table
RECONCILIATION GUIDANCE TABLE (unaudited) ($ in 000,000) Twelve Months Ending December 31, 2022 Low High Estimated net income $ 481.5 520.1 Adjustments to arrive at estimated EBITDA, as adjusted: Interest expense and other, net 61.0 58.0 Income tax expense 169.2 182.7 Depreciation and amortization 1
Slide 28: TopBuild
4 TopBuild