Siteone Landscape Supply, Inc. · NYSE:SITE
Siteone Landscape Supply — Q4 2020 Earnings Presentation
25 slides from Siteone Landscape Supply's earnings presentation, Feb 24, 2021
Slide 1: Fourth Quarter and Full Year 2020 Earnings
Fourth Quarter and Full Year 2020 Earnings
Slide 2: Disclaimer
Disclaimer Forw ard-Looking Statements This presentation contains “forw ard-looking statements” w ithin the meaning of the Federal Private Securities Litigation Reform A ct of 1995. Forw ard-looking statements may include, but are not limited to, statements relating to our 2021 Adjusted EBITDA outlo
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 ■ $20 billion highly fragmented market(1) ■ More than five times the size of next competitor and only ~13% 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: Track record of performance and growth
Track record of performance and growth Net Sales Adjusted EBITDA (in Millions) 2,705 (in Millions) 260 2,358 2,112 ’15-’20 201 ’15-’20 1,862 Growth 176 Growth 1,648 33.3% 157 1,452 32.8% Sales $ 134 9.6% Adj. EBITDA $ +86% 107 +144% 32.0% 32.1% 8.5% 31.3% GM % 8.4% 8.3% Adj. EBITDA % 8.1% 29.6% +370
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 ~45 product lines in only ~21% of our target markets today… ~85 ~50 ~50 (1) Target markets as of Q4 2020 a
Slide 8: Fiscal Year 2020 highlights and recent developments
Fiscal Year 2020 highlights and recent developments Fiscal Year 2020 highlights (compared to Fiscal Year 2019): ✓ Net sales increased 15% to $2.70 billion ✓ Organic Daily Sales increased by 8% ✓ Gross profit increased 17% to $901.3 million; gross margin increased 50 basis points to 33.3% ✓ SG&A as a
Slide 9: Review of Fourth Quarter 2020 financial results
Review of Fourth Quarter 2020 financial results Summary financials Financial highlights (compared to prior year period) ($ in millions) +26% ■ Net sales increased 26% to $675.1 million Net sales 675.1 – Organic Daily Sales increased by 12% 535.0 – Acquired sales growth was $41.0 million, contributin
Slide 10: Review of Fiscal Year 2020 financial results
Review of Fiscal Year 2020 financial results Summary financials Financial highlights (compared to prior year period) ($ in millions) +15% ■ Net sales increased 15% to $2.70 billion Net sales 2,704.5 – Organic Daily Sales increased by 8% 2,357.5 – Acquired sales growth was $135.9 million, contributin
Slide 11: Balance sheet & cash flow highlights
Balance sheet & cash flow highlights For the year ended January 3, 2021 Balance sheet & cash flow highlights (compared to prior-year period) ($ in millions) ■ Working capital increased to $483.0 million, compared to $455.0 million Net debt1 $249.9 – Reflects a $36.2 million increase in cash on hand
Slide 12: Proven track record of successful acquisitions
Proven track record of successful acquisitions 2014 – 2015 2016 2017 2018 2019 2020 Total ▪ Eljay ▪ Hydro- ▪ Aspen Valley ▪ Pete Rose ▪ Cutting Edge ▪ Wittkopf Scape Landscape ▪ Diamond Head ▪ Stone Forest ▪ Atlantic Irrigation ▪ All Pro Supplies ▪ Blue Max Horticulture ▪ Stockyard ▪ Angelo's ▪ Vill
Slide 13: M&A continues to add significant value: BURNCO Landscape Centres
M&A continues to add significant value BURNCO Landscape Centres SiteOne existing ✓Closed on October 1, 2020 BURNCO Landscape Centres ✓Establishes a leading hardscapes and landscape supplies platform with 12 locations across Western Canada ✓Cross-sell opportunities ✓Purchasing synergies Source: Compa
Slide 14: M&A continues to add significant value: Hedberg Supply
M&A continues to add significant value Hedberg Supply ✓Closed on October 5, 2020 ✓Establishes a leading hardscapes and landscape supplies platform with two locations in the greater Minneapolis market ✓Cross-sell opportunities ✓Purchasing synergies SiteOne existing Hedberg Supply Source: Company data
Slide 15: M&A continues to add significant value: Alpine Materials
M&A continues to add significant value Alpine Materials ✓Closed on December 9, 2020 ✓Establishes a leading hardscapes and landscape supplies platform in the Dallas – Fort Worth market ✓Cross-sell opportunities ✓Purchasing synergies SiteOne existing Alpine Materials Source: Company data 15
Slide 16: M&A continues to add significant value: Dirt and Rock
M&A continues to add significant value Dirt and Rock ✓Closed on December 30, 2020 ✓Expands leading hardscapes position and full-line capabilities in Greater Atlanta market ✓Cross-sell opportunities ✓Purchasing synergies SiteOne existing Dirt and Rock Source: Company data 16
Slide 17: M&A continues to add significant value: Stone Center of Virginia
M&A continues to add significant value Stone Center of Virginia ✓Closed on December 31, 2020 ✓Extends leading hardscapes position in VA ✓Complements current irrigation, agronomics, landscape lighting and nursery businesses in Richmond and Fredericksburg markets ✓Cross-sell opportunities ✓Purchasing
Slide 18: M&A continues to add significant value: Lucky Landscape
M&A continues to add significant value Lucky Landscape ✓Closed on February 17, 2021 ✓Extends leading nursery position in Houston with 4th dedicated branch ✓Complements current irrigation, agronomics, landscape lighting, and hardscapes businesses in Houston ✓Purchasing synergies SiteOne existing Luck
Slide 19: Robust pipeline provides significant growth opportunity
Robust pipeline provides significant growth opportunity ✓ SiteOne is the leading industry consolidator 13% ✓ Significant sourcing advantage with 80+ associates scouting new growth opportunities 87% ✓ Our pipeline is deep and expanding ~$20bn market(1) ✓ M&A team in place to execute our acquisition s
Slide 20: 2021 outlook
2021 outlook ✓ Near-term market trends remain positive; strong growth moderating in the second half against tougher comparisons ✓ Key commercial and operational initiatives will continue to support market share gains and gross margin expansion ✓ Healthy M&A activity with a robust pipeline ✓ 2021 Adj
Slide 21: Investment highlights
Investment highlights Uniquely Clear market leader attractive industry Compelling and Proven management sustainable team growth strategy Operational and Value-creating commercial acquisitions excellence 21
Slide 22: Appendix
Appendix Non-GAAP Reconciliations
Slide 23: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation 2020 2019 ($ in millions) FY’20 Q4’20 Q3’20 Q2’20 Q1’20 FY’19 Q4’19 Q3‘19 Q2‘19 Q1‘19 Net income (loss) $121.3 $11.5 $48.2 $79.1 $(17.5) $77.7 $2.5 $34.6 $64.7 $(24.1) Income tax expense (benefit) 27.5 1.6 13.8 25.6 (13.5) 13.8 (5.6) 9.7 19.3 (
Slide 24: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation ($ in millions) 2020 2019 2018 2017 2016 2015 Net income $121.3 $77.7 $73.9 $54.6 $30.6 $28.9 Income tax expense 27.5 13.8 1.3 18.0 21.3 19.5 Interest expense, net 31.0 33.4 32.1 25.2 22.1 11.4 Depreciation & amortization 67.2 59.5 52.3 43.1 37
Slide 25: Non-GAAP reconciliations
Non-GAAP reconciliations 2020 Organic Daily Sales Reconciliation 2020 2019 ($ in millions) FY’20 Q4’20 Q3’20 Q2’20 Q1’20 FY’19 Q4’19 Q3’19 Q2’19 Q1’19 Reported Net Sales $2,704.5 $675.1 $751.9 $817.7 $459.8 $2,357.5 $535.0 $652.8 $752.4 $417.3 A Organic Sales $2,504.0 $612.7 $698.3 $758.2 $434.8 $2,
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