Gms Group Co., Ltd. · TSE:544A
Gms — Investor Presentation (November 2016)
25 slides from Gms's investor presentation, Nov 8, 2016
Slide 1: Safe Harbor and Basis of Presentation
Safe Harbor and Basis of Presentation Forward-Looking Statement Safe Harbor - This presentation includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All of these forward-looking statements are based on estimates and assumptions made by our
Slide 2: GMS at a Glance
GMS at a Glance ($ in millions, April FYE) Other 22% #1 North American specialty distributor of interior construction products (1) – More than 200 branches across 41 states – 13% market share in wallboard – 14% market share in ceilings $1,956 $1,858 Steel Framing 15% Ceilings 16% Balanced mix of com
Slide 3: National Platform With Local Presence And Independent Brands
National Platform With Local Presence And Independent Brands GMS has an integrated national platform, but operates through over 40 local brands that are highly regarded in their markets Branch managers are empowered and incentivized to run operations like entrepreneurs within parameters of the overa
Slide 4: Product Overview
Product Overview Primarily consists of complementary interior construction products, including joint compound, finishing materials, tools and fasteners, safety products and EIFS (exterior insulation and finishing system) #1 Market Position Suspended ceiling systems primarily comprised of mineral fib
Slide 5: A One-Stop-Shop for the Interior Contractor
A One-Stop-Shop for the Interior Contractor GMS Serves as a Critical Link Between Suppliers and a Highly Fragmented Customer Base - Specialty wallboard distributors lead the wallboard distribution channel with ~65% - Specialty distributors account for ~90% of ceilings distribution channel Steel Fram
Slide 6: Highly Attractive Industry Structure
Highly Attractive Industry Structure Number of North American suppliers declined from 12 in late 1990s to 7 today The top 4 represent ~76% of the market (1) Highly consolidated supplier base Average price increase of ~4% annually since 2007 (2) GMS maintains a strong, long-standing relationship with
Slide 7: Leading Specialty Distributor Poised for Continued Growth
Leading Specialty Distributor Poised for Continued Growth Market Leader with Significant Scale Advantages – #1 North American Distributor of Wallboard and Ceilings Differentiated Service Model Drives Market Leadership Multiple Levers to Drive Above-Market Growth – Market Share, Greenfields, M&A, Ope
Slide 8: Market Leader with Scale Advantages
Market Leader with Scale Advantages More than 200 branches across 41 states #1 position in wallboard and ceilings with 13% and 14% market share, respectively National scale and leading market positions drive: - - - Purchasing advantage over smaller competitors Access to market leading ceilings (with
Slide 9: Differentiated Service Model Drives Market Leadership
Differentiated Service Model Drives Market Leadership reaching the end customer support, expertise, and sourcing entiated Weight And Delivery Requirements ce Model execution technology and equipment 10 Logistics Execution is Critical Given Reputation for best-in-class delivery Strong processes, sequ
Slide 10: Multiple Levers to Drive Growth
Multiple Levers to Drive Growth ($ in millions, April FYE) $1,956 $1,858 Continued Market Share Gains Greenfield Branch Openings CAGR: 44% $161 $150 $8 $991 Strategic Acquisition Opportunities in Highly Fragmented Market FY-12 FY-13 FY-14FY-15 FY-16 LTM Q1 17 FY-12 FY-13 FY-14 FY-15 FY-16 LTM Q1 17
Slide 11: Strong History of Market Share Gains
Strong History of Market Share Gains GMS Wallboard Market Share Significant Competitive Advantages: Scale and leading market positions drive competitive advantage 21.7% (3) CY2015 13.1% Breadth of product availability and access to leading brands and latest product innovations 17.3% (2) CY2014 Highl
Slide 12: Attractive Acquirer with Significant Consolidation Opportunity
Attractive Acquirer with Significant Consolidation Opportunity Quarter Rationale Acquisition Industry Structure: Large, highly fragmented industry comprised of ~400 competitors Similar business operations enable efficient integration Limited number of scaled players LTM Sales of $27.0 million Nice g
Slide 13: Significant Opportunity to Further Expand the Platform
Significant Opportunity to Further Expand the Platform GMS has a demonstrated history of successful expansion through greenfields and acquisitions GMS has limited or no presence in just over 40% of the top 100 MSAs in the U.S. Significant opportunity for share gains in new and existing markets over
Slide 14: Capitalizing on Large and Diverse End Markets Poised for Continued Growth
Capitalizing on Large and Diverse End Markets Poised for Continued Growth GMS's business mix is diversified across commercial and residential as well as new construction and R&R end markets, all of which are expected to continue to see robust growth New Commercial Construction • End markets still we
Slide 15: Entrepreneurial Culture And Experienced Leadership Driving Superior Execution
Entrepreneurial Culture And Experienced Leadership Driving Superior Execution Senior management averages 25 years in the industry and over 20 years with GMS VPs of Operations across all seven geographic divisions have 30+ years of industry experience and have worked with GMS for 25+ years on average
Slide 16: Financial Highlights
Financial Highlights Proven track record of driving consistent above market growth and share gains Above-Market Growth Ability to deliver superior service and a comprehensive product suite Well positioned to capitalize on recovery in construction end markets Attractive End Market Dynamics Balanced e
Slide 17: Q1 2017 Highlights
Q1 2017 Highlights Net sales increased 21.5% to $549.8 million Base business net sales up 9.2% despite one fewer shipping day Wallboard unit volume grew 20.0% to 818 million square feet Above-Market Growth Net income tripled to $9.2 million Gross margin expanded 140 basis points to 32.5% Adjusted EB
Slide 18: Attractive Capital Structure
Attractive Capital Structure Post IPO Leverage of 3.4x Net Debt / LTM Adj. EBITDA as of 7/31/16, after use of $157.2 million net proceeds from IPO and $2.8 million cash on hand to pay off $160 million Second Lien Term Loan Continued improvement in credit metrics from 6.0x Net Debt / LTM Adj. EBITDA
Slide 19: Appendix
Unsaved Document / 2/6/2014 / 22:45 Appendix
Slide 20: Summary Quarterly Financials
Summary Quarterly Financials Note: Fiscal year end April 30. 22 (In millions, except per share data) 1Q16 2Q16 3Q16 4Q16 (Unaudited) Wallboard Volume (MSF) 681 700 646 816 Wallboard Price ($ / '000 Sq. Ft.) $ 310 $ 306 $ 305 $ 305 Wallboard $ 211 $ 214 $ 197 $ 249 Ceilings 79 75 65 78 Steel framing
Slide 21: Quarterly Net Sales
Quarterly Net Sales ($ in millions) (Unaudited) Base Business (1) (2) Acquisitions (2) Total Net Sales Business Days (3) Net Sales by Business Day Base Business Branches (4) (5) Acquired Branches (5) Total Branches Note: Fiscal year end April 30. (1) When calculating our “base business” results, we
Slide 22: Quarterly Net Income to Adjusted EBITDA
Quarterly Net Income to Adjusted EBITDA Commentary A. Represents non-cash compensation expenses related to stock appreciation rights agreements ( $ in 000s) (Unaudited) Net Income (Loss) B. Represents non-cash compensation expense related to changes in the fair values of noncontrolling interests Add
Slide 23: Quarterly Cash Flows
Quarterly Cash Flows ($ in millions) (Unaudited) Historical 1Q16 2Q16 3Q16 4Q16 FY16 1Q17 Net income (loss) Non-cash changes Changes in primary working capital components: Trade accounts and notes receivable Inventories Accounts payable Cash provided by (used in) operating activities $3.0 (2.6) $ 2.
Slide 24: SG&A Adjustments Table
SG&A Adjustments Table Commentary A. Represents non-cash compensation expenses related to stock appreciation rights agreements (Unaudited) ($ in millions) 1Q16 2Q16 3Q16 4Q16 1Q17 B. Represents non-cash compensation expense related to changes in the fair values of noncontrolling interests SG&A - Rep
Slide 25: www.gms.com