Brightview Holdings, Inc. · NYSE:BV
Brightview — Investor Day (September 2021)
114 slides from Brightview's investor day presentation, Sep 21, 2021
Slide 1: Welcome to Investor Day
Welcome to Investor Day September 21, 2021
Slide 2: Introductory Information
Introductory Information Forward-Looking Statements This presentation contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 that involve substantial risks and uncertainties. All statemen
Slide 3: Agenda
Welcome John Shave, Vice President, Investor Relations Company Overview Andrew Masterman, President and Chief Executive Officer Technology and Todd Chambers, EVP and Chief Marketing Officer Digital Transformation Brian Bruce, EVP and Chief Information Officer Landscape Maintenance Jamie Gollotto, Pr
Slide 4: BrightView Overview
Inspiring People. Nurturing Landscapes. BrightView Overview Andrew Masterman, President and Chief Executive Officer September 21, 2021
Slide 5: Who is BrightView?
Who is BrightView? 5
Slide 6: Building on the traditions of best-in-class service and value creation
Building on the traditions of best-in-class service and tremendous value creation from proven business model Founded in 1939 + Founded in 1949 = Founded in 2014 • Primarily landscape • Provider of landscape • National presence maintenance and snow maintenance and • Evergreen and seasonal removal ser
Slide 7: BrightView – so much more than landscape services
MAINTENANCE BrightView – so much more than landscape services Water management Mowing Gardening Mulching Snow services Tree care & irrigation Sweeping & Golf course parking lot services Landscape installation Disaster recovery Sports fields maintenance Landscape design DEVELOPMENT Design + Landscape
Slide 8: BrightView today
BrightView today LANDSCAPE MAINTENANCE LANDSCAPE DEVELOPMENT FY’20 74% 26% Revenue $1.7 BILLION of revenues $0.6 BILLION of revenues $2.3B Essential commercial landscaping & snow services Landscape architecture & development services Business • Non-discretionary service • New landscapes / large-scal
Slide 9: Everything we do is grounded in our vision and mission
Everything we do is grounded in our vision and mission Our Our people create and maintain VISION the best landscapes on Earth Nuestro Nuestra gente crea y mantiene los mejores VISIÓN paisajes de la Tierra To create customer value through Our engaged local teams, providing MISSION industry-leading la
Slide 10: BrightView investment thesis
BrightView investment thesis 10
Slide 11: BrightView has a compelling investment thesis
BrightView has a compelling investment thesis BrightView is #1 player in $70B fragmented market Proven & experienced leadership team committed to the principles of ESG Attractive, scalable business model underpinned by cash generation Track record of M&A success, core to top-line growth 11
Slide 12: We are the largest player in a large and fragmented market
We are the largest player in a large and fragmented market Commercial landscaping and snow removal Maintenance Market opportunity services industry ~ $70B U.S. Commercial Landscaping and Snow $70 $70 $68 $69 $70 $71 $72 $59 $62 $65 350k companies ‘15A ‘16A ‘17A ‘18A ‘19A ’20E ’21E ’22E ’23E ’24E Bri
Slide 13: BrightView has a proven & experienced leadership team
BrightView has a proven & experienced leadership team Andrew Masterman President and Chief Executive Officer John Feenan EVP, Chief Financial Officer Tom Donnelly President, Landscape Development Jeff Herold President Evergreen West & COO (Maintenance Services) Michael Dozier President Evergreen Eas
Slide 14: ESG is embedded in the fabric of our company culture
ESG is a significant part of our legacy and is embedded in the fabric our company culture Social Environment Responsibility Corporate Sustainability Governance Est Since 1949 Approximately About More than Since Trees planted KGs of People Green cards H2B Visas Governance annually carbon offset emplo
Slide 15: Cash flow is our key financial metric
Cash flow is our key financial metric Attractive financial model delivers reliable, multi-year free cash flow …over time we deliver growth and consistent free cash flow ~$500M FCF in last 4 years Though weather & labor may add variability to shorter-term forecasts… 15
Slide 16: BrightView labor: recruiting in a difficult, inflationary environment
BrightView labor: successfully recruiting labor in a difficult, inflationary environment • Hired ~5K new employees, per annum, in April / May • Executed in 2021, despite challenges • Experienced ~4% wage rate inflation FY18 – FY20 FY21 Q3 / Q4 ~7% wage inflation Mitigating actions • Proactive pric
Slide 17: Business model creates a cycle of high free cash flow and reinvestment
BrightView’s business model creates a cycle of high free cash flow and reinvestment capacity Profitable Recurring incremental revenue growth (New sales + M&A) Resilient recurring revenue streams Abundant accretive M&A opportunity Strong cash conversion creates continuous cash flow and investment cap
Slide 18: Strong, consistent strategy will drive growth & value creation
Strong, consistent strategy will drive growth & value creation NATIONAL PRESENCE EMPLOYEES Superior capability to roll up Provide safe & rewarding place for fragmented industry using our cash employees to work and grow careers CUSTOMER EXPERIENCE TECH Continue our investment in Leverage our technolo
Slide 19: The advantages of scale are many
The advantages of scale are many; taken together they are immensely powerful Buying Investment in Professionalism Wide local power systems & tools as differentiator presence • Training: • Multiple sites in • Leadership most geographies • Customer service • Operational • Careers efficiencies • Safety
Slide 20: Multiple levers drive top-line growth
Multiple levers drive top-line growth Dedicated, locally- Investing in 200+ person business based salesforce to development team solely focused generate new sales on securing new customers Omnichannel, digital 2.4% Driving segmentation to identify Market marketing to expand Share attractive customer
Slide 21: M&A is an important component of value creation
M&A is an important component of value creation Robust pipeline of desirable M&A transactions exists from constantly-evolving industry 27 completed deals since 2017 Dedicated team, disciplined and repeatable framework Accretive transactions Initiated ~1,000 inquiries Value-creating use of free cash
Slide 22: Preferred acquirer in commercial landscaping
Preferred acquirer in commercial landscaping 2017 2018 2019 2020 20211 2022 Annualized $70.6M $117.6M $83.1M $99.5M $152.0M revenue Portland, OR Fresno, CA Mesa, AZ Austin, TX San Jose, CA Multiple targets Anaheim, CA Bay Area, CA Hartford, CT Plymouth, MN under Rock Hill, SC San Diego, CA Las Vegs,
Slide 23: We will drive long-term shareholder value
We will drive long-term shareholder value, continuing the legacy of the last 80 years #1 player in $70B fragmented market Proven & experienced leadership team Attractive, scalable business model Track record of M&A success, core to top-line growth 23 1Our financial guidance, which was updated on 11/
Slide 24: BrightView
BrightView :
Slide 25: Technology and Digital Transformation
Inspiring People. Nurturing Landscapes. Technology and Digital Transformation Todd Chambers, EVP, Chief Marketing Officer Brian Bruce, EVP, Chief Information Officer September 21, 2021
Slide 26: Technology and digital transformation will drive growth
Our focus on technology and digital transformation will drive growth Customer retention New sales Digital Operational efficiencies Technology transformation 26
Slide 27: Focus on Technology
Focus on Technology 27
Slide 28: BrightView application blueprint
BrightView application blueprint Customer Substantial investments in best-in-class solutions enable Engagement the business Operations Standard apps drive process efficiency, productivity and Management seamless roll-up acquisitions Integrated architecture supports Enterprise sophisticated business
Slide 29: Customer Engagement: Utilize tech to drive retention, CSAT and sales
Customer Engagement: Utilize tech to drive higher retention, CSAT and sales Solution Benefits / Business Impact CRM & What’s next: • Ensure accurate Job estimates and pricing Estimating • Track and manage end-to-end customer Service Confirmation – Customers receive text touchpoints / email alerts wi
Slide 30: Customer Engagement: Utilize tech to drive retention, CSAT and sales
Customer Engagement: Utilize tech to drive higher retention, CSAT and sales Solution Benefits / Business Impact CRM & • Track and manage end-to-end customer Estimating touchpoints • Ensure accurate Job estimates and pricing Integrated suite • Drive consistent, high-quality account mgmt. for all touc
Slide 31: Customer Engagement: Utilize tech to drive retention, CSAT and sales
Customer Engagement: Utilize tech to drive higher retention, CSAT and sales Solution Benefits / Business Impact CRM & • Track and manage end-to-end customer Estimating touchpoints • Ensure accurate Job estimates and pricing Integrated suite • Drive consistent, high-quality account mgmt. for all touc
Slide 32: Operations Management: Extend analytics for improved decision-making
Operations Management: Extend analytics for improved decision-making and process efficiencies Solution Benefits / Business Impact Operations • Optimize labor and material plans at Branch / What’s next: Planning Market level Production Planning – Extend Ops Planning Consolidated • Proactive Branch pl
Slide 33: Operations Management: Extend analytics for improved decision-making
Operations Management: Extend analytics for improved decision-making and process efficiencies Solution Benefits / Business Impact Operations • Optimize labor and material plans at Branch / Planning Market level Consolidated • Proactive Branch planning to reduce costs and Branch analysis increase eff
Slide 34: Operations Management: Extend analytics for improved decision-making
Operations Management: Extend analytics for improved decision-making and process efficiencies Solution Benefits / Business Impact Operations • Optimize labor and material plans at Branch / Planning Market level Consolidated • Proactive Branch planning to reduce costs and Branch analysis increase eff
Slide 35: Focus on Digital Transformation
Focus on Digital Transformation 35
Slide 36: Digital transformation
Digital Technology transformation Local presence Awareness generation Omnichannel digital marketing 36
Slide 37: Local digital presence: BrightView is a local business
Local digital presence: BrightView is a local business Google search 1 We are seeing results up 44% Visits Digital ad 2 over prior year Local web page 3 37
Slide 38: Increasing awareness: Building brand / expanding our reach
Increasing awareness: Building brand / expanding our reach INTRODUCTION TARGETED MESSAGE KEEPING IN TOUCH Be confident your landscape is taken care of with BrightView HOA Connect 38
Slide 39: Omnichannel enables stronger customer connections
Omnichannel enables stronger customer connections Single channel Multi channel Cross channel Omnichannel ADS ADS 39
Slide 40: What omnichannel drives at BrightView
What omnichannel drives at BrightView Omnichannel The Goal Results • Greater awareness • More efficient • Better interaction • Lower cost per click • Ability to build more • More people, more touches compelling message • Leads are more qualified / about “why BrightView” more valuable to sales • Driv
Slide 41: Summary: Technology enablement drives growth
Summary: Technology enablement drives growth Stronger customer Operational Increased effectiveness engagement efficiencies of digital marketing • Customer retention • Cost savings • Local presence • Grow ancillary sales • Better quality • Awareness generation • Safety • Omnichannel drives sales 41
Slide 42: BrightView
BrightView :
Slide 43: BrightView: Maintenance / Seasonal division
Inspiring People. Nurturing Landscapes. BrightView: Maintenance / Seasonal division Jamie Gollotto, President Seasonal September 21, 2021
Slide 44: Landscape Maintenance
LANDSCAPE MAINTENANCE Water management Mowing Gardening Mulching Snow services Tree care & irrigation Sweeping & Golf course parking lot services Landscape installation Disaster recovery Sports fields maintenance Landscape design
Slide 45: Three regional maintenance divisions
Local company with national presence – consisting of three regional maintenance divisions SEASONAL Jamie Gollotto, President EVERGREEN WEST Jeff Herold, President and COO EVERGREEN EAST Michael Dozier, President 45
Slide 46: Three regional maintenance divisions
Local company with national presence – consisting of three regional maintenance divisions SEASONAL Jamie Gollotto, President EVERGREEN WEST Jeff Herold, President and COO EVERGREEN EAST Michael Dozier, President 46
Slide 47: BrightView Landscape Maintenance at a glance
BrightView Landscape Maintenance at a glance FY2020 Revenue: $1.7B By End Market By Contract Size $s Land/Snow/Ancillary Mix $B Under $10k Retail / 4% hospitality 8% Parks, sports & $10k - $25k Residential/ leisure 13% Ancillary HOA 41% 10% $0.45 Over $100k $25k - $50k Other 51% 16% 8% Snow Contract
Slide 48: Growth initiatives
Growth initiatives 48
Slide 49: Maintenance division growth initiatives
Maintenance division has identified several initiatives to support company growth Develop and Drive organic Accelerate retain talent growth price increase 49
Slide 50: Growth initiatives: Develop and retain talent
Growth initiatives: Develop and retain talent • Create talent pipelines and build bench strength • Recruitment Process Outsourcing (RPO) ATTRACT partnerships ie. Manpower & HIRE • BrightView University programs and on-demand learning • Onboarding programs ENGAGE • Vision, Mission and Culture efforts
Slide 51: Making BrightView a great place to work
Making BrightView a great place to work by celebrating milestones, safety and more 51
Slide 52: Drive organic growth through our land contracts
Initiative: We will continue to drive organic growth through our land contracts Land organic contract growth ($M) $1,200 $1,140 - $1,175 ~$1,075 +2-3% $1,056 Compound Growth $1,000 +2% Growth $800 FY20 Results FY21 Estimate FY24 Outlook 52
Slide 53: Initiative: Organic growth from new business
Initiative: Organic growth from new business Planned actions • Strengthen business developer (BD) retention • Increase BD headcount by 10%+ • Aggressively target jobs where incumbent had labor issues in 2021 • Solution-based proposals via support from Marketing Goals • Continual, active pipeline gro
Slide 54: Responding to our customer's shifting priorities
We are responding to our customer’s shifting priorities More communication +7% support from staff We asked our customers +9% “What can BrightView Ability to meet timelines provide to help me become a ‘highly satisfied’ customer?’ +11% More proactive behavior 2021 2020 54 Source: Customer Satisfactio
Slide 55: Transparent communication and proactive observations
Initiative: Growth will be supported by transparent communication and increased proactive observations rv ic e tom er, s facing se Dear Cus th e la bo r shortage ape regarding the landsc re ce nt headlines ic . Like the rest of have seen pandem You m ay COVID-19 lenges. as a re sult of the ed these
Slide 56: Drive organic growth by developing a 5-year snow business model
Initiative: Drive organic growth by developing a 5-year snow business model Team members from Finance/HR, Technology, Operations and Sales/Marketing focused on this initiative Objective: Profitable growth, scalable service delivery model, strong market perception and aligned customer communication A
Slide 57: Drive organic growth – potential from snow business
Initiative: Drive organic growth – potential from snow business Goals: Book of Business1 ($M) • Strengthen BrightView brand in $275 ~$270E snow market • Improve employee retention $250 • Increase capture % to existing $250 land customers • Improve contribution % and EBITDA % $226 +10.6% $225 • Align
Slide 58: Initiative: Accelerate price increases
Initiative: Accelerate price increases To help offset labor pressures and rising fuel & materials costs Initiative includes: Strategy to educate customers Commitment to maintain quality Playbook includes: Why do we need to ask for higher price increases? Reasons and evidence to support price
Slide 59: Summary
Summary 59
Slide 60: Why BrightView will win
Why BrightView will win Scale – local company with national presence Systems, capabilities, relationships are in place Listening to customers, focusing on what they care about Training and retaining great teams Strong, tenured leadership …all lead to driving profitable growth at executive & branch l
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Slide 62: BrightView
BrightView :
Slide 63: BrightView Development
Inspiring People. Nurturing Landscapes. BrightView Development Tom Donnelly, EVP and President Development Services September 21, 2021
Slide 64: Three-pronged go-to-market strategy
Landscape Development has a cohesive three-pronged go-to-market strategy Strong Best Unmatched relationships solutions delivery All lead to Highly- repeatable, highly-profitable customers 64
Slide 65: Landscape Development
LANDSCAPE DEVELOPMENT DESIGN + LANDSCAPE MASONRY + HARDSCAPE IRRIGATION POOLS + WATER SOIL MIXING SPORTS FIELD PREDEV INSTALLATION CONCRETE INSTALLATION SYSTEMS FEATURES + TESTING INSTALLATION
Slide 66: Industry leader, local company with national presence
Industry leader, local company with national presence 66 ¹ Per Engineering News-Record’s annual ranking of the Top 600 Specialty Contractors according to annual construction revenue in a prime or subcontracting capacity.
Slide 67: Repeat marquee clients through intense customer focus
Repeat marquee clients through intense customer focus FY2020 Revenue: $0.6B By End Market By Contract Size Public/Private Mix 100% Commercial >$10M <$0.5M 30% 19% 14% 31% Hotels 41% 45% 6% Public $0.5M - $1M Streetscapes 13% facilities $5M - $10M 20% 50% 7% 16% $1M - $3M 69% Athletic 59% 55% fields
Slide 68: Client experience made easy through self-performed services
Development’s client experience is made easy through a wide array of self-performed services Landscape contractors Bri g h t Vi ew contractors Specialty POOLS + SOIL SPORTS Tip LANDSCAPE IRRIGATION MASONRY + HARDSCAPE DESIGN + INSTALL SYSTEMS CONCRETE INSTALL WATER MIXING FIELD PREDEV of the FEATURE
Slide 69: We intend to stay at the leading edge of this industry
We intend to stay at the leading edge of this industry Culture of continuous improvement, since 2007 Functional Centers of Excellence, estimating, procurement & admin to support branch network Depth of horticultural experience and dedication to the craft of landscape Investment in mobile technology;
Slide 70: Our ability to scale is a competitive advantage
Our ability to scale is a competitive advantage Long track record of profitable growth Landscape Development Revenue ($M) $595.7 History of developing new leaders from within 3.2% $572.7 $552.5 Deep bench is a $542.8 foundation for organic growth Nashville, New York, Salt Lake City Accretive acquisi
Slide 71: Skilled and highly-trained workforce
BrightView Development has a skilled and highly-trained workforce 2,400+ total team members 2,000+ field work force 420+ professional / design staff 20+ tenured business developers Average employee tenure Branch Manager / VP 11+ years Superintendents 10+ years Foreman/Leadman 7+ years Laborer 3+ yea
Slide 72: Representative branch structure supports scalability
BrightView’s representative branch structure supports our scalability throughout markets Branch manager Responsible for financial performance and client development 2-3 Build relationships, establish costs, Sales and Estimating proactive solutions, timely proposals Client focused, nurturing relation
Slide 73: Key indicators suggest strong runway for growth
Key indicators suggest strong runway for growth in next 12 to 36 months Total Put-in-Place Construction 1995 - 2025 Population Growth Architectural Billings Index ($T) 60 1.56 CA 56% 55 NM 55% AZ 53% 50 FL 46% 45 1.46 TX 45% 40 CO 38% 35 GA 37% 1.36 NC 30% 30 June Feb Mar Apr May June Jan-19 Jul-19
Slide 74: Combined strategies lead to attractive financial results
Combined strategies lead to attractive financial results Robust long-tail backlogs Highly diversified revenue streams Strong free cash flow Disciplined capex management at ~2% of revenue EBITDA margins in top quartile performance 74
Slide 75: Cohesive three-pronged go-to-market strategy
Cohesive three-pronged go-to-market strategy Strong relationships Best solutions Unmatched delivery • National network AND local • Design & pre-development • Highly-tenured workforce with branches with local people services unparalleled craftsmanship • Branch manager relationships • Customized and/o
Slide 76: BrightView
BrightView :
Slide 77: Environmental, Social & Governance
Inspiring People. Nurturing Landscapes. Environmental, Social & Governance Amanda Orders, EVP and Chief Human Resources Officer Brett Urban, Chief Financial Officer, BrightView Landscape Services September 21, 2021
Slide 78: Our commitment to ESG makes BrightView a great place to work
Our commitment to ESG will continue to make BrightView a great place to work and will contribute to our success Environment Social Corporate Sustainability Responsibility Governance Our People Our Communities • Water conservation • Health & safety • BrightView fund • Board composition & diversity •
Slide 79: Carbon neutrality initiative
Carbon neutrality initiative 79
Slide 80: GOAL: Carbon neutral by 2035
BrightView’s carbon neutrality pledge As the best landscaper on earth, our mission will be to lead the landscaping industry to carbon neutrality and beyond Eliminate CO2 discharge Remove CO2 in the air Ensure environmental • Replace all carbon • Capture and store objects are sustained emitting sourc
Slide 81: Our environmental strategy will increase value
Our environmental strategy will increase value for our employees, communities, customers and shareholders Stewardship: BrightView Cleaner Fleet: Reduce engagement in the industry to emissions by replacing fleet facilitate transformational with electric and fuel- change efficient vehicles Sustainabil
Slide 82: Initiatives toward carbon neutrality by 2035
BrightView’s initiatives toward carbon neutrality by 2035 2022 - 2023 By 2027 By 2030 2035 Deploy ~500 electric/hybrid All management vehicles Convert production vehicles electric/hybrid vehicles Begin 2-cycle equipment All 2-cycle equipment Retrofit on leased conversion converted to electric proper
Slide 83: BrightView's branch of the future
BrightView’s branch of the future 83
Slide 84: Social responsibility
Social responsibility 84
Slide 85: Our greatest opportunity is building engaged teams
Our greatest opportunity is to continue our focus on building engaged teams 5,600+ active employees have BV stock and are company owners 85
Slide 86: Industry leader in employee retention
Industry leader in employee retention Employee Turnover Leadership Retention 80% 90% 89% 69% 65% 64% 88% 87% 58% 60% 46% 86% 53% 42% 41% 40% 84% 83% 82% 81% 20% 80% 0% 78% 2018 2019 2020 2021 76% BrightView Turnover Industry Benchmark 2018 2019 2020 2021 Data Source: US Bureau of Statistics 85% Rete
Slide 87: We have been building BrightView University
We have been building BrightView University Comprised of leadership development, career path programs and core business process skills Programs for: • Entry-level Landscapers • Production Managers • Account Managers • Business Developers • Branch Managers • Senior Leaders 87
Slide 88: BrightPath Landscaper career path program
BrightPath Landscaper career path program – on the job training and coaching A Brighter Future Starts Here All materials provided in both English and Spanish 88
Slide 89: Diversity, Equity and Inclusion (DEI) strategy
We continue to enhance and develop BrightView’s Diversity, Equity and Inclusion (DEI) strategy and solutions Build DEI processes into: • Increase representation of • Provide diversity education / training • Hiring practices diversity at all levels of BrightView to raise awareness and • Learning & le
Slide 90: Social justice - part of social responsibility
Social justice - part of social responsibility at BrightView Our fund for Social Justice supports organizations and initiatives that promote equality and inclusion at the local level, sponsored by a local branch team 26 organizations across the country received grants from BV 90
Slide 91: Governance
Governance 91
Slide 92: Only national landscaping company upholding E-Verify across 50 states
BrightView remains the only national landscaping company upholding the E-Verify standard across 50 states February 2016 December 2016 Today • Legacy entities used the Every BrightView branch At this time, we are E-Verify program only if location went live with compliant with E-Verify required by sta
Slide 93: Industry leader in corporate governance
Industry leader in corporate governance • Board diversity is a priority • Majority of Board is independent • Board’s Audit Committee is fully independent • Compensation Committee and Nominating & Governance Corporate Governance Committee are each majority independent 93
Slide 94: We continue to prioritize and make progress on our ESG initiatives
We continue to prioritize and make progress on our ESG initiatives Environment Social Corporate Sustainability Responsibility Governance 94
Slide 95: BrightView
BrightView .
Slide 96: Financial Review and Outlook
Inspiring People. Nurturing Landscapes. Financial Review and Outlook John Feenan, EVP and Chief Financial Officer September 21, 2021
Slide 97: BrightView is a compelling investment opportunity
BrightView is a compelling investment opportunity LTM Free Cash Flow Enterprise Value CY2021E Price-to- Yield1 / CY2021E Adjusted EBITDA Earnings (P/E) Ratio 12.0% 12.2x 22.9x 9.0x 4.6% 12.5x BV Peers* BV Peers* BV Peers* BV trades at a significant discount relative to its peers Expect solid top lin
Slide 98: Two foundational financial principles
BrightView’s has two foundational financial principles Rebuilt BV model for consistent Consistent and resilient free cash organic growth flow generation Facts… Facts… • 10% snow contract growth in Q2’21 • Since FY18, have delivered ~ $500M2 FCF • 12% land organic growth in Q3’21 • Maintained steady
Slide 99: Business model creates a cycle of high free cash flow and reinvestment
BrightView’s business model creates a cycle of high free cash flow and reinvestment capacity Profitable Recurring incremental revenue growth (New sales + M&A) Resilient recurring revenue streams Abundant accretive M&A opportunity Strong cash conversion creates continuous cash flow and investment cap
Slide 100: Expects solid top-line growth…4% - 6% per annum
BrightView expects solid top-line growth…4% - 6% per annum Maintenance segment Development segment New acquisitions growth: organic growth: 2-3% organic growth: 1-2% 2-3% • Highly-fragmented $70B market* • Project driven • Consistent, reliable growth lever • Sales team investment • Consistent growth
Slide 101: Margin improvement: Path to 13% consolidated margin
Margin improvement: Path to 13% consolidated margin 2021 outlook: • Solid improvement over 2020 (11.6%) 11.7% – 11.8% • Still hampered by delayed ancillary / development rebound • Continued rebound back to FY19 penetration levels Ancillary rebound • Highest margin revenue stream within Maintenance s
Slide 102: Stable and predictable model for free cash flow generation
Stable and predictable model for free cash flow generation Adj. EBITDA growth Working capital CapEx discipline • Organic growth efficiency • Modest 3.0-3.5% of • Cost productivity • Improving DSO revenue • Accretive M&A • Disciplined AP oversight • Capacity to invest in • Minimal inventory growth St
Slide 103: 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 Established client base Proven financial results Existing leadership and Disciplined and repeatable employee roster M&A framework Similar investment needed for tuck-in acquisition and new
Slide 104: Long-term margin enhancement through M&A
Long-term margin enhancement 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 i
Slide 105: Accretive ROIC through M&A strategy
Accretive ROIC through M&A strategy FY18 FY19 FY20 FY212 Enterprise 12.4% 12.4% 11.1% 12.2% ROIC1 Implied 13.5% 15.6% 13.2% 17.2% M&A ROIC3 Implied cumulative 14.3% 13.9% 14.9% M&A ROIC Returns on M&A accretive to the enterprise 1 Defined as Adjusted EBITDA Divided by Total Financial Debt Plus Stock
Slide 106: Key BrightView Financial Takeaways
Key BrightView Financial Takeaways Free cash flow1 Annual Range ~$120M+ Component drivers to achieve free cash flow target include: Top line revenue growth Organic Low single digit M&A Low single digit EBITDA margin 12.0%-13.0% Cash conversion2 ~80% 1 Defined as Cash from operating activities Minus
Slide 107: Questions
Questions 107
Slide 108: BrightView has a compelling investment thesis
BrightView has a compelling investment thesis BrightView is #1 player in $70B fragmented market Proven & experienced leadership team committed to the principles of ESG Attractive, scalable business model underpinned by cash generation Track record of M&A success, core to top-line growth 108
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Slide 110: Appendix
Appendix 110
Slide 111: M&A ROIC Support: FY18 Actual - FY21 Estimate
M&A ROIC Support: FY18 Actual - FY21 Estimate FY18 FY19 FY20 FY21 Adjusted EBITDA $300.1 $305.1 $271.6 $302.81 / Total Financial Debt & $2,411.7 $2,454.0 $2,443.8 $2,485.72 Stockholders’ Equity = BV Enterprise ROIC 12.4% 12.4% 11.1% 12.2% Annual M&A Completed Revenue $117.6 $83.1 $99.5 $152.0 Illust
Slide 112: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation Twelve Months Ended Three Months Ended September 30, June 30, March 31, December 31, September 30, 2020 2019 2018 (In millions) 2021 2021 2020 2019 Adjusted EBITDA Net income (loss) $ 25.2 $ 6.3 $ (12.0) $ (6.1) $ (41.6) $ 44.4 $ (15.1) Plus: Interest expense, net 9.4
Slide 113: 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 114: Non-GAAP to GAAP Reconciliation (cont.)
Non-GAAP to GAAP Reconciliation (cont.) (j) Represents isolated expenses specifically related to the integration of acquired companies such as one-time employee retention costs, employee onboarding and training costs, and fleet and uniform rebranding costs. The Company excludes Business integration