Siteone Landscape Supply, Inc. · NYSE:SITE
Siteone Landscape Supply — Q3 2019 Earnings Presentation
21 slides from Siteone Landscape Supply's earnings presentation, Oct 30, 2019
Slide 1: Third Quarter 2019 Earnings
Third Quarter 2019 Earnings October 30, 2019
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 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 ■ $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: Track record of performance and growth
Track record of performance and growth 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% 7.3% +200 bps 26.4% 6.3% FY
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: Third Quarter 2019 highlights and recent developments
Third Quarter 2019 highlights and recent developments Third Quarter 2019 highlights: ✓ Net sales increased by 13% to $652.8 million ✓ Organic Daily Sales increased by 7% ✓ Gross profit increased 13% to $215.2 million; gross margin 33.0% ✓ SG&A as a percentage of net sales decreased 90 basis points t
Slide 9: Review of Third Quarter 2019 financial results
Review of Third Quarter 2019 financial results Summary financials Financial highlights ($ in millions) ■ Net sales increased 13% to $652.8 million – Organic Daily Sales increased by 7% Net sales 578.5 652.8 – Acquired sales growth was $39.0 million, or 7% of overall growth Q3’18 Q3’19 33.0% ■ Gross
Slide 10: Review of Third Quarter 2019 balance sheet & cash flow highlights
Review of Third Quarter 2019 balance sheet & cash flow highlights Third Quarter 2019 Balance sheet & cash flow highlights ($ in millions) ■ Working capital increased to $516.2 million, compared to $513.7 million in the prior-year period – Excluding lease accounting change, working capital would have
Slide 11: Proven track record of successful acquisitions
Proven track record of successful acquisitions 2014 – 2015 2016 2017 2018 2019 YTD Total ▪ Eljay ▪ Hydro-Scape ▪ Aspen Valley ▪ Pete Rose ▪ Cutting Edge ▪ Diamond Head ▪ Blue Max ▪ Stone Forest ▪ Atlantic Irrigation ▪ All Pro Horticulture ▪ Stockyard ▪ Bissett ▪ Angelo's ▪ Village Nurseries ▪ Landsc
Slide 12: M&A continues to add significant value: Voss Materials
M&A continues to add significant value Voss Materials ✓ Closed in July 2019 ✓ Establishes a leading hardscapes position in the east bay of Northern California ✓ Cross-sell opportunities ✓ Purchasing synergies SiteOne existing Voss Materials Source: Company data 12
Slide 13: M&A continues to add significant value: Trendset Concrete Products
M&A continues to add significant value Trendset Concrete Products ✓ Closed in August 2019 ✓ Establishes a leading hardscapes position in Seattle ✓ Cross-sell opportunities ✓ Purchasing synergies SiteOne existing Trendset Concrete Products Source: Company data 13
Slide 14: M&A continues to add significant value: Design Outdoor
M&A continues to add significant value Design Outdoor ✓ Closed on September 30th (fiscal Q4’19) ✓ Establishes a leading hardscapes platform in a new MSA (Reno/Lake Tahoe) ✓ Cross-sell opportunities ✓ Purchasing synergies SiteOne existing Trendset Concrete Products SiteOne existing Design Outdoor Sou
Slide 15: 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 16: 2019 outlook
2019 outlook ✓ Underlying market trends remain positive ✓ Market share gains expected to continue ✓ Expect additional M&A activity from a strong pipeline ✓ 2019 Adjusted EBITDA expectation of $197 million to $203 million, representing year-over-year growth of 12-15%(1) ✓ Adjusted EBITDA margin expec
Slide 17: Investment highlights
Investment highlights Uniquely Clear market leader attractive industry Compelling and Proven management sustainable team growth strategy Operational and Value-creating commercial acquisitions excellence 17
Slide 18: Appendix
Appendix Non-GAAP Reconciliations
Slide 19: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation 2019 2018 2017 ($ in millions) Q3’19 Q2’19 Q1’19 Q4’18 Q3 ‘18 Q2 ‘18 Q1 ‘18 Q4 ‘17 Net income (loss) $34.6 $64.7 $(24.1) (2.1) 29.9 63.1 (17.0) 4.0 Income tax expense (benefit) 9.7 19.3 (9.6) (5.6) 2.4 14.7 (10.2) (11.4) Interest expense, net 8
Slide 20: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA Reconciliation ($ 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 $140.9
Slide 21: Non-GAAP reconciliations
Non-GAAP reconciliations Organic Daily Sales Reconciliation 2019 2018 ($ in millions) Q3’19 Q2’19 Q1’19 FY’18 Q4’18 Q3 ‘18 Q2 ‘18 Q1 ‘18 Net Sales $652.8 $752.4 $417.3 $2,112.3 $474.6 $578.5 $687.8 $371.4 Organic Sales $570.4 $660.1 $377.3 $1,983.4 $434.2 $535.1 $653.2 $360.9 A Acquisition contribut
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