Siteone Landscape Supply, Inc. · NYSE:SITE
Siteone Landscape Supply — Q4 2018 Earnings Presentation
22 slides from Siteone Landscape Supply's earnings presentation, 2019
Slide 1: Fourth Quarter 2018 Earnings
Fourth Quarter 2018 Earnings
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our 2019 Adjusted EBITDA outlook. S
Slide 3: Conference call agenda
Conference call agenda Introduction Pascal Convers, EVP S&D and IR Business Update Doug Black, Chairman and CEO Financial Update John Guthrie, CFO Development Update Pascal Convers, EVP S&D and IR 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 ■ $19 billion highly fragmented market(1) ■ More than four times the size of next competitor and only ~11% market share(1) ■ Serving residential and commercial landscape professionals Distribution C
Slide 5: SiteOne is poised for long-term growth and margin enhancement
SiteOne is poised for long-term 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: Accelerating performance and growth led by recent transformation
Accelerating performance and growth led by recent transformation Net Sales Adjusted EBITDA 176 (in Millions) (in Millions) 2,112 157 1,862 ’14-’18 Growth ’14-’18 Growth 1,648 134 1,452 Sales $ +79% 107 Adj. EBITDA $ 1,177 +138% 32.0% 32.1% 8.4% 8.3% GM % +570 bps 74 31.3% 8.1% Adj. EBITDA % 29.6% 7.
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 ~50 product lines in only ~21% of our target markets today… ~80 ~50 ~50 (1) Target markets are represented
Slide 8: Fiscal Year 2018 highlights and recent developments
Fiscal Year 2018 highlights and recent developments Fiscal Year 2018 highlights: ✓ Net sales increased by 13% to $2.11 billion ✓ Organic Daily Sales increased by 4% ✓ Gross profit increased by 14% to $678.1 million; gross margin expanded 10 bps to 32.1% ✓ Net income increased by 35% to $73.9 million
Slide 9: Fiscal Year 2018 and Fourth Quarter 2018 financial results
Fiscal Year 2018 and Fourth Quarter 2018 financial results Financial performance Fiscal Year 2018 highlights Net Income ($M) ✓ Net income for the year increased 35% to $73.9 million, compared to $54.6 million in 2017 +35% 80 70 73.9 ✓ Adjusted EBITDA increased 12% to $176.0 million, 60 54.6 compared
Slide 10: Balance sheet & cash flow highlights
Balance sheet & cash flow highlights For the year ended December 30, 2018 Balance sheet & cash flow highlights ($ in millions) ■ Operating cash flow improved by $61.8 million from $16.3 million in 2017 to $78.1 million in 2018 – Reflects the increased earnings and improvements in working Net debt (1
Slide 11: Proven track record of successful acquisitions
Proven track record of successful acquisitions 2014 2015 2016 2017 2018 2019 Total ▪ Eljay ▪ Shemin ▪ Hydro-Scape ▪ Aspen Valley ▪ Pete Rose ▪ Cutting Edge ▪ Diamond ▪ AMC ▪ Blue Max ▪ Stone Forest ▪ Atlantic Irrigation ▪ All Pro Head Horticulture ▪ Green ▪ Bissett ▪ Angelo's ▪ Village Nurseries ▪ S
Slide 12: M&A continues to add significant value
M&A continues to add significant value C&C Sand and Stone ✓ Closed in October 2018 ✓ Leading hardscapes & landscape supplies position in Denver and Colorado Springs, CO ✓ Creates full product line capability in market ✓ Cross-sell opportunities ✓ Purchasing synergies SiteOne existing C&C Sand & Ston
Slide 13: M&A continues to add significant value
M&A continues to add significant value All Around Landscape ✓ Closed in December 2018 ✓ Leading irrigation, hardscapes & landscape supplies position in the Central Coast of CA ✓ Creates full product line capability in market ✓ Cross-sell opportunities ✓ Purchasing synergies SiteOne existing All Arou
Slide 14: M&A continues to add significant value
M&A continues to add significant value Cutting Edge ✓ Closed in January 2019 ✓ Leading hardscapes and landscape supplies platform in Phoenix metro ✓ Cross-sell opportunities ✓ Purchasing synergies SiteOne existing Cutting Edge Source: Company data 14
Slide 15: M&A continues to add significant value
M&A continues to add significant value All Pro Horticulture ✓ Signed in February 2019 ✓ Leading agronomics platform in Long Island, NY ✓ Purchasing synergies ✓ Cross-sell opportunities SiteOne existing All Pro Source: Company data 15
Slide 16: Robust pipeline provides significant growth opportunity
Robust pipeline provides significant growth opportunity ✓ SiteOne is the leading industry consolidator 11% ✓ Significant sourcing advantage with 70+ associates scouting new growth opportunities 89% ✓ Our pipeline is deep and expanding ~$19bn market(1) ✓ M&A team in place to execute our acquisition p
Slide 17: 2019 outlook
2019 outlook ✓ Underlying market trends remain positive ✓ Market share gains expected to continue ✓ Expect robust M&A activity from a strong pipeline ✓ 2019 Adjusted EBITDA expectation of $193 million to $207 million, representing year-over-year growth of 10-18%(1) ✓ Adjusted EBITDA margin expected
Slide 18: Investment highlights
Investment highlights Uniquely Clear market leader attractive industry Compelling and Proven management sustainable team growth strategy Operational and Value-creating commercial acquisitions excellence 18
Slide 19: Appendix
Appendix Non-GAAP Reconciliations
Slide 20: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation 2018 2017 ($ in millions) Year Q4’18 Q3 ‘18 Q2 ‘18 Q1 ‘18 Year Q4 ‘17 Q3 ‘17 Q2 ‘17 Q1 ‘17 Net income (loss) $73.9 (2.1) 29.9 63.1 (17.0) $54.6 4.0 16.9 44.2 (10.5) Income tax expense (benefit) 1.3 (5.6) 2.4 14.7 (10.2) 18.0 (11.4) 10.7 26.3 (7
Slide 21: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation ($ in millions) 2018 2017 2016 2015 2014 Net income $73.9 $54.6 $30.6 $28.9 $21.7 Income tax expense 1.3 18.0 21.3 19.5 14.4 Interest expense, net 32.1 25.2 22.1 11.4 9.1 Depreciation & amortization 52.3 43.1 37.0 31.2 20.3 EBITDA $159.6 $140.9
Slide 22: Non-GAAP reconciliations
Non-GAAP reconciliations Organic Daily Sales Reconciliation 2018 2017 Year Qtr 4 Qtr 3 Qtr 2 Qtr 1 Year Qtr 4 Qtr 3 Qtr 2 Qtr 1 Reported Net sales $ 2,112.3 $ 474.6 $ 578.5 $ 687.8 $ 371.4 $ 1,861.7 $ 415.7 $ 502.4 $ 608.6 $ 335.0 Organic sales 1,849.5 404.3 498.2 609.1 337.9 1,770.8 387.1 476.0 578
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