Brightview Holdings, Inc. · NYSE:BV
Brightview — Q3 2020 Earnings Presentation
24 slides from Brightview's earnings presentation, Aug 5, 2020
Slide 1: Third Quarter Fiscal 2020 Earnings Call
Third Quarter Fiscal 2020 Earnings Call NYSE: BV August 5, 2020
Slide 2: Introductory Information
Introductory Information This presentation contains forward looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this presentation, including statements regarding our industry, strategy, future operations, future
Slide 3: Quarter Highlights and Business Update
Quarter Highlights and Business Update Andrew Masterman | President and Chief Executive Officer 3Q FY2020 Earnings Presentation | 3
Slide 4: Executive Overview
Executive Overview All branches operational with no limitations on the scope of services Free Cash Flow increased 200% year-over-year Total Q3 Fiscal 2020 Revenue declined 7.5%, driven by COVID impacts Total Adjusted EBITDA margin of 15% Contract-based business remained at 98% of prior year 3Q FY202
Slide 5: 4Q FY2020 Financial Guidance
4Q FY2020 Financial Guidance1 Total Revenue Adjusted EBITDA Net Capital Expenditures $585M - $610M $85M - $89M ~2.5% of Revenue Resilient Contract-Based Strong Profitability 4Q Target Business 4Q 2020 Assumptions Revenue: expect COVID-19 related headwinds to impact Ancillary demand Acquisitions:
Slide 6: COVID-19 Business Continuity
COVID-19 Business Continuity Teams Never Stopped Working • Social Distancing strategies remain in effect • Smaller crews, Staggered start times, Intact crew teams • Evolved start/end of shift practices: ETC, stretch and flex, gate check, shut down • Implemented daily screening protocol Branch Office
Slide 7: COVID-19 Business Continuity (con't)
COVID-19 Business Continuity (con’t) Landscaping recognized as essential service and our team has navigated difficult cycles in the past Exercising prudence, maintaining contract base, protecting margins, preserving liquidity and managing CapEx and working capital Two largest verticals, HOAs and com
Slide 8: "Strong-on-Strong" Acquisitions
“Strong-on-Strong” Acquisitions Napa, CA Rock Hill, SC Austin, TX 1 2020 San Diego, CA Bay Area, CA Syracuse, NY 2019 Mesa, AZ Norcross, GA Tucson, AZ Hartford, CT Phoenix, AZ Danville, CA 2018 Fort Lauderdale, FL Shamong, NJ Portland, OR Vista, CA Dallas, TX $350M+ 2017 Annualized revenue Sanford,
Slide 9: M&A Offers Attractive Use of Capital
M&A Offers Attractive Use of Capital M&A Offers Lower Risk Option to Expand in New Markets and Existing Markets Similar Investment Needed for Tuck-In Acquisition and New BV Branch* Establish New $5M BV Branch Tuck-In Acquisition Item Cost Range Item Cost Range Capital Expenditures $1.6M - $1.8M Annu
Slide 10: Value Creation Through M&A
Value Creation Through M&A Illustrative Financials at Acquisition Revenue EBITDA Margin Multiple $5.0M $0.5M 10.0% 5.0x Implementing BrightView Operating Model… Accelerate Operational Enhanced Cost Growth Productivity Procurement Synergies Increases Shareholder Value Full Integration into BrightView
Slide 11: Financial Review and Outlook
Financial Review and Outlook John Feenan | EVP and Chief Financial Officer 3Q FY2020 Earnings Presentation | 11
Slide 12: 3Q FY2020 Revenue
3Q FY2020 Revenue (Numbers $M) 3Q20 3Q19 Commentary • (7.5)% Decrease Total Revenue $608.1 $657.2 • (+) Strong-on-Strong M&A & Contract Stability • (-) COVID-19 Headwinds • (6.5)% Decrease Maintenance Services $460.0 $492.1 • (+) Strong-on-Strong M&A • (-) COVID-19 Headwinds (Ancillary Demand) • (10
Slide 13: 3Q FY2020 Adjusted EBITDA
3Q FY2020 Adjusted EBITDA (Numbers $M) 3Q20 3Q19 Commentary • (10.7)% Decrease Total Adj. EBITDA $91.0 $101.9 • 15.0% Adjusted EBITDA margin • 50 basis point contraction • (7.8)% Decrease Maintenance Services $84.0 $91.1 • 18.3% Adjusted EBITDA margin • 20 basis point contraction • (21.9)% Decrease
Slide 14: 9M FY2020 Results
9M FY2020 Results (Numbers $M) Revenue Adjusted EBITDA 9M20 9M19 9M20 9M19 Total BrightView $1,737.9 $1,779.9 $181.6 $213.1 Maintenance Services $1,295.1 $1,358.0 $172.9 $204.8 Development Services $445.5 $424.7 $53.9 $55.0 Corporate Expenses - - ($45.2) ($46.7) 3Q FY2020 Earnings Presentation | 14
Slide 15: Capital Expenditures, Net Debt and Free Cash Flow
Capital Expenditures, Net Debt and Free Cash Flow 2 3 Capital Net Debt Free Cash Flow Expenditures $1,170.6 $77.2 $119.8 $6.8 $1,111.6 $45.9 $70.4 $3.8 Net 1 1 $42.1 $38.8 Capex Net 1 Capex 1 9M19 9M20 Q319 Q320 9M19 9M20 Asset Disposals Net CapEx / Total Revenue Net Debt / LTM Adjusted EBITDA Free
Slide 16: Liquidity Update
Liquidity Update $(M) As of 6/30/2020 Revolving Credit Facility $182.0 Receivables Financing Agreement 29.6 Total Credit Available 211.6 Cash and Cash Equivalents 89.9 Total Liquidity $301.5 Debt Maturities: Receivables Financing Agreement Maturity: February 2022 Revolving Credit Facility Te
Slide 17: Closing Remarks
Closing Remarks Andrew Masterman | President and Chief Executive Officer 3Q FY2020 Earnings Presentation | 17
Slide 18: Key Takeaways
Key Takeaways COVID-19 related headwinds expect to impact Ancillary demand Fundamentals of business and industry remain strong Exceptional Free Cash Flow generation to fund M&A and pay down debt Continued focus on managing working capital and CapEx Entered crisis in a position of strength and expect
Slide 19: Questions & Answers
3Q FY2020 Earnings Call QUESTIONS & ANSWERS 3Q FY2020 Earnings Presentation | 19
Slide 20: Appendix
BrightView P Inspiring People. Nurturing Landscapes. Appendix
Slide 21: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation Three Months Ended Nine Months Ended June 30, June 30, (in millions)* 2020 2019 2020 2019 Adjusted EBITDA Net (loss) income $ (2.4 ) $ 31.7 $ (35.5 ) $ 19.3 Plus: Interest expense, net 15.4 18.4 49.9 54.4 Income tax (benefit) expense (0.3 ) 11.0 (11.9 ) 6.6 Depreciati
Slide 22: Non-GAAP to GAAP Reconciliation (cont.)
Non-GAAP to GAAP Reconciliation (cont.) (a) Represents costs incurred to establish public company financial reporting compliance, including costs to comply with the requirements of Sarbanes-Oxley and the accelerated adoption of the revenue recognition standard (ASC 606 – Revenue from Contracts with
Slide 23: Non-GAAP to GAAP Reconciliation (cont.)
Non-GAAP to GAAP Reconciliation (cont.) Total Financial Debt and Total Financial Net Debt September 30, (in millions)* June 30, 2020 2019 June 30, 2019 Long-term debt, net $ 1,159.1 $ 1,134.2 $ 1,145.8 Plus: Current portion of long-term debt 10.4 10.4 10.4 Financing costs, net 14.7 17.1 18.0 Present
Slide 24: Thank You
Thank You Investor Relations Contact: Media Contact: John E. Shave Fred Jacobs VP of Investor Relations VP of Communications & Public Affairs 484.567.7148 484.567.7244 John.Shave@BrightView.com Fred.Jacobs@BrightView.com investor.brightview.com