Slide 1: Third Quarter Fiscal 2019 Earnings Call
Third Quarter Fiscal 2019 Earnings Call NYSE: BV August 7, 2019
Slide 2: Introductory Information
Introductory Information This presentation contains forward looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this presentation, including statements regarding our financial outlook, industry, strategy, future
Slide 3: Quarter Highlights and Business Update
Quarter Highlights and Business Update Andrew Masterman | President and Chief Executive Officer 3Q FY2019 Earnings Presentation | 3
Slide 4: Executive Summary
Executive Summary Strong Revenue and Profitability, despite challenging weather conditions Contract growth in Maintenance Services supports future topline growth Robust bookings and pipeline in Development Services, 4Q19 & FY2020 M&A pipeline continues generating strong on strong growth opportunitie
Slide 5: 3Q FY2019 Revenue
3Q FY2019 Revenue (Numbers $M) 3Q19 3Q18 Commentary • 4.3% Increase Total Revenue $657.2 $630.3 • (+) Contract Revenue, Bookings and M&A • (-) Managed Exits, Snow and Wet Weather • 3.7% Increase Maintenance Services $492.1 $474.6 • (+) Contract Revenue and Acquisitions • (-) Managed Exits, Snow and
Slide 6: Leveraging Technology to Drive Growth
Leveraging Technology to Drive Growth Digitization of BrightView Continues Electronic Time Capture (ETC) being implemented in Development Segment Multiple training sessions with each group of branch-level team leaders Hundreds of ETC-enabled iPhones deployed to the field Focus on increasing
Slide 7: Operational Update
Operational Update M&A, H-2B and Major League Baseball Continued pursuing our Strong on Strong acquisition strategy Purchased FirstService Residential’s landscaping business in May 2019 Luke’s Landscaping, Inc. in South Florida Desert Classic Landscaping in Phoenix valley area Received a s
Slide 8: Financial Review and Outlook
Financial Review and Outlook John Feenan | EVP and Chief Financial Officer 3Q FY2019 Earnings Presentation | 8
Slide 9: FY2019 Financial Guidance
FY2019 Financial Guidance Total Revenue Adjusted EBITDA Net Capital Expenditures $2,400M - $2,470M $310M - $318M ~2.5% of Revenue Predictable Drivers Profitable Growth Long-Term Average Full Year 2019 Assumptions Acquisitions: expect contribution of around $90 million to fiscal 2019 revenue EBIT
Slide 10: 3Q FY2019 Results
3Q FY2019 Results Revenue Adj. EBITDA Adj. EBITDA Margin1 ∆ YoY ∆ YoY ∆ YoY (bps) $657.2 M $101.9 M 15.5% Up 4.3% Up 4.2% Unchanged Maintenance Services – Revenue up 3.7% / Adj. EBITDA flat + Contract revenue growth and continued M&A contributions – Managed exits, lower snow removal and wet weathe
Slide 11: 3Q FY2019 Adjusted EBITDA
3Q FY2019 Adjusted EBITDA (Numbers $M) 3Q19 3Q18 Commentary • 4.2% Increase Total Adj. EBITDA $101.9 $97.8 • 80 basis point Gross Margin expansion • Flat Adjusted EBITDA margin versus 3Q18 • (0.2)% Decrease Maintenance Services $91.1 $91.3 • 18.5% Adjusted EBITDA margin • 70 basis point contraction
Slide 12: 9M FY2019 Results
9M FY2019 Results (Numbers $M) Revenue Adjusted EBITDA 9M19 9M18 9M19 9M18 Total BrightView $1,779.9 $1,771.8 $213.1 $215.9 Maintenance Services $1,358.0 $1,341.4 $204.8 $210.2 Development Services $424.7 $433.6 $55.0 $55.3 Corporate Expenses - - ($46.7) ($49.6) 3Q FY2019 Earnings Presentation | 12
Slide 13: Capital Expenditures and Net Debt
Capital Expenditures and Net Debt Capital Expenditures Net Debt 2 $1,174.1 $77.2 $1,170.6 $71.7 $6.8 $3.9 $21.6 Legacy Assets $70.4 Net 1 $46.2 Capex Net 1 Capex 9M18 9M19 Mar. 31, '19 Jun. 30, '19 Asset Disposals Net CapEx / Total Revenue: Net Debt / Adjusted EBITDA 2.6% at 9M18 vs. 4.0% at 9M19 4.
Slide 14: Focus on Disciplined Execution
Focus on Disciplined Execution Strong financial performance despite challenging comps and weather Highly cash-generative business model with clear priorities: Strong-on-strong acquisition strategy Reduce financial leverage over time Generate long-term stockholder value 3Q FY2019 Earnings Presentatio
Slide 15: Closing Remarks
Closing Remarks Andrew Masterman | President and Chief Executive Officer 3Q FY2019 Earnings Presentation | 15
Slide 16: Closing Remarks
Closing Remarks BrightView has a clear strategy to drive long-term, profitable growth Results in 2019 reflect initial positive impacts of strategic initiatives Technology will strengthen operations and customer relationships Will continue consolidation of top quartile commercial landscaping industry
Slide 17: Questions & Answers
Questions & Answers 3Q FY2019 Earnings Presentation | 17
Slide 18: Appendix
Appendix 3Q FY2019 Earnings Presentation | 18
Slide 19: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation Three Months Ended Nine Months Ended June 30, June 30, (in m illions)* 2019 2018 2019 2018 Adjusted EBITDA Net income (loss) $ 31.7 $ (1.4) $ 19.3 $ (4.1) Plus: Interest expense, net 18.4 27.5 54.4 77.5 Income tax expense (benefit) 11.0 1.2 6.6 (58.2) Depreciation exp
Slide 20: Non-GAAP to GAAP Reconciliation (cont.)
Non-GAAP to GAAP Reconciliation (cont.) Three Months Ended Nine Months Ended June 30, June 30, (in m illions)* 2019 2018 2019 2018 Adjusted Net Income Net loss $ 31.7 $ (1.4) $ 19.3 $ (4.1) Plus: Amortization expense 13.9 29.2 42.9 89.6 Establish public company financial reporting compliance (a) 1.1
Slide 21: Non-GAAP to GAAP Reconciliation (cont.)
Non-GAAP to GAAP Reconciliation (cont.) Three Months Ended Nine Months Ended June 30, June 30, (in m illions)* 2019 2018 2019 2018 Severance and related costs $ 0.4 $ 1.1 $ 2.0 $ 3.3 Rebranding of vehicle fleet 0.1 0.4 0.4 12.4 Business integration 3.0 0.2 6.8 0.4 IT Infrastructure transformation an
Slide 22: Non-GAAP to GAAP Reconciliation (cont.)
Non-GAAP to GAAP Reconciliation (cont.) (in millions)* June 30, 2019 March 31, 2019 September 30, 2018 Long-term debt, net $ 1,145.8 $ 1,147.5 $ 1,141.3 Plus: Current portion of long-term debt $ 10.4 $ 10.4 $ 13.0 Financing costs, net 18.0 18.9 20.0 Present value of net minimum payment - capital lea
Slide 23: Thank You
Thank You Investor Relations Contact: Media Contact: Daniel Schleiniger Fred Jacobs VP, Investor Relations VP, Communications & Public Affairs 484.567.7148 484.567.7244 Daniel.Schleiniger@BrightView.com Fred.Jacobs@BrightView.com investor.brightview.com