Slide 1: Investor Presentation
Investor Presentation August 2021
Slide 2: Disclaimer
Disclaimer Notice This presentation (“Presentation”) is being issued by BuildDirect.com Technologies Inc. (the “Corporation” or “BuildDirect”) for information purposes only. Reliance on this Presentation for the purpose of engaging in any investment activity may expose a person to significant risk o
Slide 3: The Premier Online Heavy Goods Retailer
The Premier Online Heavy Goods Retailer • Superior product selection • Unmatched purchasing and delivery infrastructure • Best-in-class customer service 20+ $80M Breakeven 75 Years Experience Pro Forma LTM Revenue Pro Forma LTM Net Promoter Score EBITDA Run Rate 3
Slide 4: Investment Highlights
Investment Highlights • Superior digital platform and infrastructure have created an online leader • Positioned to acquire independent retailers and their Pro relationships • Combination will create an unrivaled offering for underserved B2B customers • Scaling through disruption of a growing TAM rip
Slide 5: E-commerce: Differing Perspectives
E-commerce: Differing Perspectives Consumers CONSUMER Retailers Success is less a function of website quality than core platform, which requires complex Selection functionality to profitably operate at scale: • Technology platform • Manufacturing relationships Price visibility • Inventory management
Slide 6: Heavy Goods E-commerce = Complexity
Heavy Goods E-commerce = Complexity2 Multiple factors increase the complexity Post COVID of heavyweight ecommerce: 2-5 years of adoption Pre COVID pulled forward • Extreme weight M A R K E T P E N E T R AT I O N • Extreme size • Vulnerability to damage • Extended buying cycles Amazon Wayfair BuildDi
Slide 7: A TAM Poised for Disruption
A TAM Poised for Disruption Total U.S. $71B 45% Independent Retailers Flooring • Dominate the market • Missing the online channel Market 4% Online 24% Big Box • Home Depot, Floor & Décor, Lumber Liquidators • Online represents a unique opportunity in a fragmented brick and mortar market • Online sal
Slide 8: Growth Strategy
Leverage leading digital platform and e-commerce position DiPhy Acquire independent retailers to grow brick and mortar reach Growth Strategy digital + Capture B2B professionals to increase share physical expansion Expand into carpet, services, and installation 8
Slide 9: Our Bulletproof E-commerce Platform for Heavy Goods
Our Bulletproof E-commerce Platform for Heavy Goods M A N U FA C T U R I N G R E L AT I O N S H I P S & I N V E N TO R Y M A N A G E M E N T A N D S U P P LY C H A I N D E L IV ERY LO G IS TICS 5,000+ Gateway floor & building product SKUs network advantage Direct from manufacturer pricing and Flexib
Slide 10: Comprehensive Flooring Platform Unmatched in the Market
Comprehensive Flooring Platform Unmatched in the Market PROVIDED NOT A STRENGTH Independent Post DiPhy BuildDirect Home Depot/F&D Wayfair/Build.com (B2B sales) Execution PRODUCT Hardwood / Vinyl FOCUS Carpet Local Pick-up Local Sales Teams / DISTRIBUTION Relationships Job-site Delivery Ecommerce / P
Slide 11: Increasing Share of PRO Market
Increasing Share of PRO Market B 2B ORDER V O LUM E GRO W TH Partnerships 10x ▪ Installation 1,800 ▪ B2B payment terms 1,300 1,200 LTV of B2B professional Services vs. homeowner driven by: ▪ Customer lead generation ▪ Larger basket sizes ▪ Back office ▪ Recurring orders Provides B2B a single source
Slide 12: Unit Economics
Unit Economics (USD) Homeowners Pros 2018A 2019A 2020A 2018A 2019A 2020A Contribution Contribution ($205) ($45) $75 $35 $170 $305 Profit Per Order Profit Per Order YoY Revenue Growth 46% YoY Revenue Growth 15% Purchasing Homeowners 15,000 New Pros Acquired 1,250 YoY Growth 40% YoY Growth 31% Average
Slide 13: Target Rich Pool Ripe for Consolidation
Target Rich Pool Ripe for Consolidation Missing e-commerce channel functionality Highly fragmented $32B Higher product and inventory costs Challenges faced by High value High B2B market share independent independent retailers benefits to driven by strong loyalty flooring share of U.S. flooring Build
Slide 14: Strong Funnel of Near-term Actionable Acquisition Targets
Strong Funnel of Near-term Actionable Acquisition Targets 40-60 1,000+ strong U.S. candidates independent from retailers WELL-DEFINED INVESTMENT CRITERIA ▪ B2B focused revenue mix Potential benefit of four near-term acquisition targets ▪ $20-70M topline ▪ Top 3 regional player ▪ 5-year track record
Slide 15: Independent Retailer Case Study
Independent Retailer Case Study Lower product costs 4.2x Favorable structure Expanded assortment 3.7x with sufficient New leads + incremental 100% conversion rates downside protection Job site delivery B2B revenue mix profile 2.7x $30M revenue (2019) $4M EBITDA – 13.2% margin 4.2x EBITDA multiple EB
Slide 16: Historical Financial Performance
Historical Financial Performance1 1 Revenue Gross Profit and Gross Profit Margin2 (USD millions) (USD millions) 37.4% 35.4% 38.4% 39.3% 37.1% $23.4 $8.8 $20.9 39.1% $7.4 $16.2 $6.2 $13.1 $13.7 $5.2 $5.1 $9.1 $3.6 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 Q1.20 Q2.20 Q3.20 Q4.20 Q1.21 Q2.21 Significantly i
Slide 17: Revenue Summary and Forecast
Revenue Summary and Forecast 1 1 Revenue (USD millions) $90 - $98 $81 Focus on unit economics and profitability $29 $46 $41 $46 $52 $41 2018A 2019A 2020PF 2021E E-commerce Independent Retailer 1Revenues presented based on International Financial Reporting Standards “IFRS” and 2018-2020 E-Commerce re
Slide 18: Operationally Focused Management
Operationally Focused Management MANAGEMENT Dan Park Natalie Ku Ethan Rudin Geoff Fawkes David Montagliani CEO COO CFO / Partnerships VP Technology VP Category Mgmt World class operator. 25-year Promoted to COO in 2019 20-years experience in finance, 25-years experience as a Our resident product exp
Slide 19: Investment Highlights
Investment Highlights • Superior digital platform and and infrastructure have created an online leader • Positioned to acquire independent retailers and their professional relationships • Combination will create an unrivaled offering for underserved B2B customers • Scaling through disruption of a gr
Slide 20: Appendix: Project Nevada
Appendix Project Nevada Bankers slides 20
Slide 21: Gateway Network Advantage
Gateway Network Advantage Shipping model drives density and reduces shipping costs and lead times • Multiple access points (Five BuildDirect and 65 supplier warehouses) with additional access points added continuously • Increasing density and proprietary freight relationships thus continually reduci
Slide 22: BuildDirect Revenue Segmentation
BuildDirect Revenue Segmentation 1 Customer Type Geography Category 0.8% 5.3% 32.5% 67.5% 99.2% 94.7% Homeowner Pro US CA Remodel New Build 0.5% 11.2% 44.4% 55.6% 99.5% 88.8% Homeowner Pro US CA Remodel New Build 1The foregoing are for illustrative purposes only and are based on BuildDirect’s unaudi
Slide 23: Risk Factors
Risk Factors Investing in BuildDirect.com Technologies Inc. (“BuildDirect” or the “Corporation”) involves significant risks given the early stage nature of the Corporation’s business. Prior to investing in the Corporation, prospective investors are urged to consult with their legal, investment, acco
Slide 24: Risk Factors
Risk Factors Third-Party Supply Chain Network: The Corporation sources product from around the world and sells to customers throughout North America and relies on third party ocean, freight, trucking and warehouse service providers to transport and store its products and deliver products to its cust
Slide 25: Risk Factors
Risk Factors Call Centre and Website: The Corporation’s website and call center are material elements of the Corporation’s business. Customers use the Corporation’s website to source and purchase the Corporation’s products and services. The Corporation’s website in particular is vulnerable to certai
Slide 26: Risk Factors
Risk Factors Litigation: BuildDirect may become party to litigation from time to time in the ordinary course of business which could adversely affect its business. Monitoring and defending against legal actions, whether or not meritorious, can be time-consuming, divert management’s attention and res
Slide 27: Risk Factors
Risk Factors Cybersecurity: The Corporation relies on digital and internet technologies to conduct and expand its operations, including reliance on information technology to process, transmit and store sensitive and confidential data, including personally identifiable information, and proprietary an
Slide 28: Risk Factors
Risk Factors Intellectual Property: From time to time, the Corporation may receive notices from third parties alleging that it has infringed their intellectual property rights or may need to pursue claims against third parties to defend the Corporation’s intellectual property rights. Responding and/
Slide 29: Risk Factors
Risk Factors Conflicts of Interest: The Corporation may be subject to various potential conflicts of interest because of the fact that some of its officers, directors and consultants may be engaged in a range of business activities, including certain officers, directors and consultants that provide
Slide 30: Risk Factors
Risk Factors Tax Risk: The Corporation will be considered to have been carrying on business in Canada for purposes of the Income Tax Act (Canada). However the Corporation operates in a new and developing industry that has had historically low regulations and tax compliance. There is risk that foreig
Slide 31: Risk Factors
Risk Factors Difficulty to Forecast: BuildDirect must rely largely on its own market research to forecast sales as detailed forecasts are not generally obtainable from other sources. A failure in the demand for its products to materialize as a result of competition, technological change or other fac