Siteone Landscape Supply, Inc. · NYSE:SITE
Siteone Landscape Supply — Q2 2022 Earnings Presentation
25 slides from Siteone Landscape Supply's earnings presentation, August 2022
Slide 1: Second Quarter 2022 Earnings
Second Quarter 2022 Earnings
Slide 2: Disclaimer
Disclaimer Forw ard-Looking Statements This presentation contains “forward-looking statements” w ithin the meaning of the Private Securities Litigation Reform Act of 1995. Forw ard-looking statements may include, but are not limited to, statements relating to our 2022 Adjusted EBITDA outlook. Some o
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 wholesale distributor of landscape supplies ■ $23 billion highly fragmented market(1) ■ More than five times the size of next competitor and only ~15% market share(1) ■ Serving residential and commercial landscape professionals ■ Complementar
Slide 5: SiteOne is poised for continued growth and margin enhancement
SiteOne is poised 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 integ
Slide 6: Track record of performance and growth
Track record of performance and growth Net Sales Adjusted EBITDA (in Millions) (in Millions) 415 3,476 ’16-’21 ’16-’21 2,705 Growth Growth 2,358 2,112 260 1,862 Sales $ 11.9% Adj. EBITDA $ 1,648 34.9% 201 +111% 176 +209% 33.3% 157 32.8% 134 32.1% 9.6% Adj. EBITDA % 31.3% 32.0% GM % 8.5% +360 bps 8.4
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… ~75 ~60 ~50 (1) Target markets as of Q4 2021 a
Slide 8: Second Quarter 2022 highlights and recent developments
Second Quarter 2022 highlights and recent developments Second Quarter 2022 highlights (compared to second quarter 2021): ✓ Net sales increased 12% to $1.22 billion ✓ Organic Daily Sales increased 8% ✓ Gross profit increased 19% to $461.1 million; gross margin increased 210 basis points to 37.9% ✓ SG
Slide 9: Review of Second Quarter 2022 financial results
Review of Second Quarter 2022 financial results Summary financials Financial highlights ($ in millions) +12% ■ Net sales increased 12% YoY to $1.22 billion – Organic Daily Sales increased 8% due to price inflation Net sales 1,083.9 1,216.6 resulting from rising product costs, partially offset by dam
Slide 10: Balance sheet & cash flow highlights
Balance sheet & cash flow highlights For the quarter ended July 3, 2022 Balance sheet & cash flow highlights (compared to prior-year period) ($ in millions) ■ Working capital increased to $885.1 million, compared to $623.8 million – Increased inventory reflecting supply chain uncertainty, product co
Slide 11: Proven track record of successful acquisitions
Proven track record of successful acquisitions 2014 - 2018 2019 2020 2021 2022 YTD Total 2017 ▪ Pete Rose ▪ Cutting Edge ▪ Wittkopf Landscape ▪ Lucky Landscape ▪ JK Enterprise Supplies ▪ Atlantic Irrigation ▪ All Pro Horticulture ▪ Arizona Stone & ▪ BellStone Masonry ▪ Empire Supplies Solstice ▪ Vil
Slide 12: M&A continues to add significant value: BellStone Masonry
M&A continues to add significant value BellStone Masonry ✓Closed on April 22nd ✓Extends hardscapes presence in large DFW market ✓Purchasing synergies ✓Cross-selling synergies SiteOne BellStone Source: Company data 12
Slide 13: M&A continues to add significant value: Preferred Seed
M&A continues to add significant value Preferred Seed ✓Closed on April 28th ✓Establishes a leading agronomics presence in Upstate New York ✓Purchasing synergies ✓Cross-selling synergies SiteOne Preferred Seed Source: Company data 13
Slide 14: M&A continues to add significant value: Across the Pond
M&A continues to add significant value Across the Pond ✓Closed on June 17th ✓Expands product offering in Huntsville, AL market to include hardscapes and bulk landscape supplies ✓Purchasing synergies ✓Cross-selling synergies SiteOne Across the Pond Source: Company data 14
Slide 15: M&A continues to add significant value: Yard Works
M&A continues to add significant value Yard Works SiteOne ✓Closed on June 22nd Yard Works ✓Extends strong bulk landscape supplies position into Central and Southern Virginia ✓Purchasing synergies ✓Cross-selling synergies Source: Company data 15
Slide 16: M&A continues to add significant value: Prescott Dirt
M&A continues to add significant value Prescott Dirt ✓Closed on June 30th ✓Expands product offering in Prescott, AZ market to include landscape supplies ✓Purchasing synergies SiteOne ✓Cross-selling synergies Prescott Dirt Source: Company data 16
Slide 17: M&A continues to add significant value: A&A Stepping Stone
M&A continues to add significant value A&A Stepping Stone ✓Closed on July 1st ✓Establishes hardscapes platform in Sacramento, CA market ✓Purchasing synergies ✓Cross-selling synergies SiteOne A&A Stepping Stone Source: Company data 17
Slide 18: M&A continues to add significant value: River Valley Horticultural
M&A continues to add significant value River Valley Horticultural ✓Closed on July 22nd ✓Establishes a nursery platform in the Little Rock, AR market and expands the hardscapes product offering ✓Purchasing synergies ✓Cross-selling synergies SiteOne River Valley Source: Company data 18
Slide 19: Robust pipeline provides significant growth opportunity
Robust pipeline provides significant growth opportunity ✓ SiteOne is the leading industry consolidator 15% ✓ Significant sourcing advantage with 80+ associates scouting new growth opportunities 85% ✓ Our pipeline is deep and expanding ~$23bn market(1) ✓ Experienced M&A team recently expanded to driv
Slide 20: 2022 Outlook
2022 Outlook ✓ Market trends remain reasonable against tough comparisons ✓ Key commercial and operational initiatives are expected to support market share gains and high-single digit organic daily sales growth ✓ Continued M&A activity with robust pipeline ✓ Raising 2022 Adjusted EBITDA expectation t
Slide 21: Investment highlights
Investment highlights Uniquely Clear market leader attractive industry Compelling and Proven management sustainable team growth strategy Operational and Value-creating commercial acquisitions excellence 21
Slide 22: Appendix
Appendix Non-GAAP Reconciliations
Slide 23: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation 2022 2021 2020 ($ in millions) Q2’22 Q1’22 Q4’21 Q3’21 Q2’21 Q1’21 Q4’20 Q3’20 Reported Net income $140.7 $32.3 $27.5 $80.0 $123.5 $7.4 $11.5 $48.2 Income tax (benefit) expense 44.8 4.6 2.7 19.1 36.8 (2.5) 1.6 13.8 Interest expense, net 4.6 4.3
Slide 24: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation ($ in millions) 2021 2020 2019 2018 2017 2016 Reported Net income $238.4 $121.3 $77.7 $73.9 $54.6 $30.6 Income tax expense 56.1 27.5 13.8 1.3 18.0 21.3 Interest expense, net 19.2 31.0 33.4 32.1 25.2 22.1 Depreciation & amortization 83.0 67.2 59
Slide 25: Non-GAAP reconciliations
Non-GAAP reconciliations 2022 Organic Daily Sales Reconciliation 2022 2021 ($ in millions) FY’22 Q4’22 Q3’22 Q2’22 Q1’22 FY’21 Q4’21 Q3’21 Q2’21 Q1’21 Reported Net Sales -- -- -- $1,216.6 $805.3 $3,475.7 $805.2 $936.4 $1,083.9 $650.2 A Organic Sales -- -- -- $1,145.5 $760.1 $3,386.4 $772.1 $908.2 $1
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