FIRST QUARTER 2022 EARNINGS - SITEONE LANDSCAPE SUPPLY
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First Quarter 2022 Earnings
Disclaimer
Forward-Looking Statements
This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not
limited to, statements relating to our 2022 Adjusted EBITDA outlook. Some of the forward-looking statements can be identified by the use of terms such as “may,” “intend,” “might,” “will,”
“should,” “could,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “project,” “potential,” or the negative of these terms, and similar expressions. You should be aware that
these forward-looking statements are subject to risks and uncertainties that are beyond our control. Further, any forward-looking statement speaks only as of the date on which it is
made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of
anticipated or unanticipated events or circumstances. New factors emerge from time to time that may cause our business not to develop as we expect, and it is not possible for us to
predict all of them. Factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the
following: cyclicality in residential and commercial construction markets; economic downturn or recession; general economic and financial conditions; demand for our products;
seasonality of our business; climate change-related events, weather conditions, seasonality, and availability of water to end-users; inflation and increased operating costs; the potential
negative impact of the ongoing COVID-19 pandemic (which, among other things, may exacerbate each of the forward-looking statements discussed here); public perceptions that our
products and services are not environmentally friendly or that our practices are not sustainable; competitive industry pressures, including competition for our talent base; supply chain
disruptions, product or labor shortages, and the loss of key suppliers; cybersecurity incidents involving our systems or third party systems, including the July 2020 ransomware attack;
prices for the products we purchase may fluctuate; ability to pass along product cost increases; inventory management risks; ability to implement our business strategies and achieve
our growth objectives; acquisition and integration risks, including increased competition for acquisitions; risks associated with our large labor force and our customers’ labor force
(including headwinds due to COVID-19) and ongoing labor market disruptions; retention of key personnel; construction defect and product liability claims; impairment of goodwill; adverse
credit and financial markets events and conditions; credit sale risks; performance of individual branches; climate, environmental, health and safety laws and regulations; hazardous
materials and related materials; laws and government regulations applicable to our business that could negatively impact demand for our products; failure or malfunctions in our
information technology systems; security of personal information about our customers; intellectual property and other proprietary rights; unanticipated changes in our tax provisions;
threats from terrorism, public health emergencies, violence, uncertain political conditions and geopolitical conflicts such as the ongoing conflict between Russia and Ukraine; risks related
to our current indebtedness and our ability to obtain financing in the future; increases in interest rates; risks related to our common stock; and other risks, as described in Item 1A, “Risk
Factors,” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended January 2, 2022, as updated by our subsequent filings under the Securities Exchange Act of 1934,
as amended, including Forms 10-Q and 8-K.
Non-GAAP Financial Information
This presentation includes certain financial information, not prepared in accordance with U.S. GAAP. Because not all companies calculate non-GAAP financial information identically (or
at all), the presentations herein may not be comparable to other similarly titled measures used by other companies. Further, these measures should not be considered substitutes for the
information contained in the historical financial information of the Company prepared in accordance with U.S. GAAP that is set forth herein.
We present Adjusted EBITDA in order to evaluate the operating performance and efficiency of our business. Adjusted EBITDA represents EBITDA as further adjusted for items permitted
under the covenants of our credit facilities. EBITDA represents our Net income (loss) plus the sum of income tax (benefit) expense, interest expense, net of interest income, and
depreciation and amortization. Adjusted EBITDA is further adjusted for stock-based compensation expense, (gain) loss on sale of assets, and other non-cash items, financing fees, other
fees, and expenses related to acquisitions and other non-recurring (income) loss. Adjusted EBITDA does not include pre-acquisition acquired Adjusted EBITDA. Adjusted EBITDA is not
a measure of our liquidity or financial performance under GAAP and should not be considered as an alternative to Net income, operating income or any other performance measures
derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity. The use of Adjusted EBITDA instead of Net income has
limitations as an analytical tool. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of
other companies, limiting its usefulness as a comparative measure. Net debt is defined as long-term debt (net of issuance costs and discounts) plus finance leases, net of cash and cash-
equivalents on our balance sheet. Leverage Ratio is defined as Net debt to trailing twelve months Adjusted EBITDA. Free Cash Flow is defined as Cash Flow from Operating Activities,
less capital expenditures. We define Organic Daily Sales as Organic Sales divided by the number of Selling Days in the relevant reporting period. We define Organic Sales as Net sales,
including Net sales from newly-opened greenfield branches, but excluding Net sales from acquired branches until they have been under our ownership for at least four full fiscal quarters
at the start of the fiscal year. Selling Days are the number of business days, excluding Saturdays, Sundays and holidays, that SiteOne branches are open during the relevant reporting
period.
2
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
Company and industry overview
■ Largest and only national wholesale
distributor of landscape supplies
■ $23 billion highly fragmented market(1)
■ More than five times the size of next
competitor and only ~15% market share(1)
■ Serving residential and commercial
landscape professionals
■ Complementary value-added services
and product support
Distribution Center
■ Approximately 135,000 SKUs Branch
■ Over 600 branches and four distribution Balanced by product and end markets (FY21)
Outdoor
centers covering 45 U.S. states and six Control Lighting
Canadian provinces(2) Products 4%
8% Irrigation Repair & Upgrade Maintenance
Nursery 26% 27% 37%
10%
Landscape
Accessories
13%
Hardscapes
21% New
Fertilizer, Seed, & Other Construction
18% 36%
(1) As of year end 2021. Source: Management estimates, Company data, independent 3rd party support 4
(2) Branch count as of Q1’22
The SiteOne Vision – A True Company of Excellence
✓ Associates – Be a great place to work
✓ Customers – Deliver superior quality, service,
and value
✓ Suppliers – Be the distributor of choice
✓ Shareholders – Achieve industry-leading
financial performance and growth
✓ Communities – Be a good neighbor
5
SiteOne is poised for continued 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 integrate high value-added acquisitions Value creation levers
■ Entrepreneurial local area teams supported by world-class
functional support
1) Organic growth
2) Margin expansion
✓ Drive commercial and operational performance
■ Category management 3) Acquisition growth
■ Supply chain
■ Salesforce performance
■ Operational excellence
■ Marketing and Digital
6
Track record of performance and growth
Net Sales Adjusted EBITDA
(in Millions)
(in Millions) 415
3,476
’16-’21 ’16-’21
2,705 Growth Growth
2,358
2,112 260
1,862 Sales $ 11.9% Adj. EBITDA $
1,648 34.9% 201
+111% 176 +209%
33.3% 157
32.8% 134
32.1% 9.6% Adj. EBITDA %
31.3% 32.0% GM %
8.5%
+360 bps 8.4% 8.3% +380 bps
8.1%
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
Net Sales Gross Margin % Adj. EBITDA Adj. EBITDA Margin %
2015 2016 2017 2018 2019 2020 2021 2022
Initial Public Offering Performance & Growth
Building the Foundation
Brand
Acquisitions
■ McGinnis Farms (’01) ■ Hydro-Scape ■ Aspen Valley ■ Pete Rose ■ Cutting Edge ■ Wittkopf ■ Lucky Landscape ■ JK Enterprise
■ Century RainAid (’01) ■ Blue Max ■ Stone Forest ■ Atlantic Irrigation ■ All Pro Horticulture ■ Empire Supplies ■ Arizona Stone & Solstice ■ BellStone
■ UGM (’05) ■ Bissett ■ Angelo's ■ Village Nurseries ■ Landscape Depot ■ The Garden Dept ■ Timberwall ■ Preferred Seed
■ LESCO (’07) ■ Glen Allen ■ AB Supply ■ Terrazzo & Stone ■ Fisher’s Depot ■ Big Rock ■ Melrose Irrigation Supply
■ Eljay (‘14) ■ Loma Vista ■ Evergreen Partners ■ Landscaper’s Choice ■ Stone & Soil Depot ■ Alliance Stone ■ Rock & Block
■ Diamond Head (‘14) ■ East Haven ■ South Coast Supply ■ Auto-Rain ■ Voss Materials ■ Modern Builders ■ Green Brothers
■ Stockyard (‘14) ■ Marshall Stone ■ All American Stone ■ Trendset Concrete ■ BURNCO Landscape ■ Semco Stone
■ BISCO (‘14) ■ Harmony Gardens ■ Landscape Express ■ Design Outdoor ■ Hedberg Supply ■ Seffner Rock & Gravel
■ Shemin (‘15) ■ Kirkwood ■ Dirt Doctors ■ Alpine Materials
■ AMC (‘15) ■ Stone Center ■ Daniel Stone ■ Dirt and Rock
■ Green Resource (‘15) ■ CentralPro ■ Stone Center of VA
■ Tieco (‘15) ■ C&C Sand and Stone
■ All Around
Source: Company data
7
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 ~55
product lines in only
~21% of our target
markets today…
~75
~60
~50
(1) Target markets as of Q4 2021 are represented by metropolitan statistical areas (“MSAs”) where either SiteOne currently has a
presence or MSAs with a population above ~200k, which cover ~80% of the total U.S. population.
Source: Management estimates; U.S. Census Bureau 8
First Quarter 2022 highlights and recent developments
First Quarter 2022 highlights (compared to first quarter 2021):
✓ Net sales increased 24% to $805.3 million
✓ Organic Daily Sales increased by 17%
✓ Gross profit increased 34% to $269.2 million; gross margin increased 240 basis points to 33.4%
✓ SG&A as a percentage of Net sales decreased by 100 basis points to 28.6%
✓ Net income increased to $32.3 million from $7.4 million
✓ Adjusted EBITDA increased 97% to $67.8 million
✓ Adjusted EBITDA margin increased 310 basis points to 8.4%
✓ Acquired JK Enterprise Landscape Supply
Recent Developments
✓ Acquired BellStone Masonry Supply
✓ Acquired Preferred Seed
9
Source: Company data
Review of First Quarter 2022 financial results
Summary financials Financial highlights
($ in millions)
■ Net sales increased 24% YoY to $805.3 million
+24%
– Organic Daily Sales increased 17% due to solid demand and
Net sales 805.3 pricing to combat inflationary pressures
650.2
Q1’21 Q1’22
– Acquired sales growth was $43.4 million, contributing 7% to
the overall growth rate
+34%
33.4% ■ Gross profit increased 34% to $269.2 million
Gross profit 31.0%
& margin – Gross margin increased 240 basis points to 33.4%
269.2
201.5
– Driven by supply chain initiatives and price realization
Q1’21 Q1’22
■ Net income increased 336% to $32.3 million
+336%
Net income
32.3 – Driven by higher Net sales and margin improvement
7.4
Q1’21 Q1’22
■ Adjusted EBITDA increased 97% to $67.8 million
8.4%
Adjusted +97% – Adjusted EBITDA margin increased 310 basis points to 8.4%
EBITDA 5.3%
67.8
34.5
Q1’21 Q1’22
10
Source: Company dataBalance sheet & cash flow highlights
For the quarter ended April 3, 2022 Balance sheet & cash flow highlights (compared to prior-year period)
($ in millions)
■ Working capital increased to $788.4 million, compared to $538.5
million
– Increased inventory reflecting supply chain uncertainty, product cost
Working capital $788.4 inflation, and strategic purchases of inventory ahead of cost
increases
– Higher receivables attributable to strong sales growth
■ Cash used in operating activities of $118.3 million, compared to
Cash used in $45.5 million
operating $118.3 – Increased investment in working capital to support our growth
activities
■ Net debt $416.6 million, compared to $354.7 million
– Liquidity of $243.5 million consisting of $45.1 million of cash and
$198.4 million in available ABL borrowing capacity
Capital
$7.5
expenditures
■ Net debt / Adjusted EBITDA of 0.9x, compared to 1.2x
– Leverage decrease attributable to improved profitability
1 Net debt is calculated as long-term debt plus finance leases, net of cash and cash equivalents
2 Leverage ratio defined as net debt (including finance leases) to trailing twelve months Adjusted EBITDA 11
Source: Company filingsProven track record of successful acquisitions
2014 - 2017 2018 2019 2020 2021 2022 YTD Total
▪ Pete Rose ▪ Cutting Edge ▪ Wittkopf Landscape ▪ Lucky Landscape ▪ JK Enterprise
Supplies
▪ Atlantic Irrigation ▪ All Pro Horticulture ▪ Arizona Stone & ▪ BellStone
▪ Empire Supplies Solstice
▪ Village Nurseries ▪ Landscape Depot ▪ Preferred Seed
Supply ▪ The Garden Dept. ▪ Timberwall
▪ Terrazzo & Stone
▪ Fisher’s Landscape ▪ Big Rock ▪ Melrose Irrigation
▪ Landscaper’s Choice
Depot Supply
▪ Alliance Stone
▪ Auto-Rain
▪ Stone & Soil Depot ▪ Rock & Block
▪ Modern Builders
▪ All American Stone
▪ Voss Materials ▪ Green Brothers
▪ BURNCO Landscape
▪ Landscape Express
▪ Trendset Concrete Centres ▪ Semco Stone
▪ Kirkwood Products
▪ Hedberg Supply ▪ Seffner Rock & Gravel
▪ Stone Center ▪ Design Outdoor
▪ Alpine Materials
▪ CentralPro ▪ Dirt Doctors
▪ Dirt and Rock
▪ C&C Sand & Stone ▪ Daniel Stone
▪ Stone Center of
▪ All Around Virginia
# Acquisitions 22 13 10 11 8 3 67
Annualized
~$550M ~$230M ~$100M ~$190M ~$155M ~$50M ~$1,275M
net sales(1)
# branches
123 78 21 30 28 9 289
added
(1) Trailing twelve months (TTM) revenues in the year acquired 12
Source: Company dataM&A continues to add significant value
JK Enterprise Landscape Supply
✓ Closed on March 18th
✓ Significantly expands landscape
supplies and hardscapes footprint in
Virginia and Maryland
✓ Purchasing synergies
✓ Cross-selling synergies
SiteOne
JK Enterprise
Source: Company data
13M&A continues to add significant value
BellStone Masonry Supply
✓ Closed on April 22nd
✓ Extends hardscapes presence
in large DFW market
✓ Purchasing synergies
✓ Cross-selling synergies
SiteOne
BellStone
Source: Company data
14M&A continues to add significant value
Preferred Seed
✓ Closed on April 28th
✓ Establishes a leading
agronomics presence in
Upstate New York
✓ Purchasing synergies
✓ Cross-selling synergies
SiteOne
Preferred
Source: Company data
15Robust pipeline provides significant growth opportunity
✓ SiteOne is the leading industry consolidator
15%
✓ Significant sourcing advantage with 80+ associates scouting
new growth opportunities
85%
✓ Our pipeline is deep and expanding
~$23bn market(1)
✓ Experienced M&A team recently expanded to drive
continued strong acquisition growth
✓ Acquisitions are expected to be accretive and present significant
profit growth potential
(1) As of year end 2021. Management Estimates
162022 outlook
✓ Market trends remain positive, sustaining growth against tough comparisons
✓ Key commercial and operational initiatives are expected to support market
share gains and high-single digit organic daily sales growth
✓ Continued M&A activity with robust pipeline
✓ Full year Adjusted EBITDA expectation of $430 million to $450 million
✓ Modest full year Adjusted EBITDA margin decline reflecting lower gross margin
partially offset by SG&A leverage
17Investment highlights
Uniquely
Clear market leader
attractive industry
Compelling and
Proven management
sustainable
team
growth strategy
Operational and
Value-creating
commercial
acquisitions
excellence
18Appendix Non-GAAP Reconciliations
Non-GAAP reconciliations
Adjusted EBITDA Reconciliation
2022 2021 2020
($ in millions)
Q1’22 Q4’21 Q3’21 Q2’21 Q1’21 Q4’20 Q3’20 Q2’20
Net income $32.3 $27.5 $80.0 $123.5 $7.4 $11.5 $48.2 $79.1
Income tax (benefit) expense 4.6 2.7 19.1 36.8 (2.5) 1.6 13.8 25.6
Interest expense, net 4.3 5.1 4.3 4.3 5.5 9.1 6.6 7.6
Depreciation & amortization 21.7 22.3 21.0 20.3 19.4 18.2 16.3 16.4
EBITDA $62.9 $57.6 $124.4 $184.9 $29.8 $40.4 $84.9 $128.7
A Stock-based compensation 3.7 3.1 3.5 4.6 3.1 2.7 2.6 2.8
B (Gain) loss on sale of assets (0.1) 0.2 (0.2) (0.2) 0.1 (0.2) (0.4) 0.1
C Financing fees -- -- -- -- 0.7 -- -- --
D Acquisitions & other 1.3 0.9 0.5 1.3 0.8 1.0 0.7 0.5
E Adjusted EBITDA $67.8 $61.8 $128.2 $190.6 $34.5 $43.9 $87.8 $132.1
A Represents stock-based compensation expense recorded during the period.
B Represents any gain or loss associated with the sale of assets and termination of finance leases not in the ordinary course of
business.
C Represents fees associated with our debt refinancing and debt amendments.
D Represents professional fees, retention and severance payments, and performance bonuses related to historical acquisitions.
Although we have incurred professional fees, retention and severance payments, and performance bonuses related to acquisitions in
several historical periods and expect to incur such fees and payments for any future acquisitions, we cannot predict the timing or
amount of any such fees or payments.
E Adjusted EBITDA excludes any earnings or loss of acquisitions prior to their respective acquisition dates for all periods presented.
20Non-GAAP reconciliations
Adjusted EBITDA Reconciliation
($ in millions) 2021 2020 2019 2018 2017 2016
Net income $238.4 $121.3 $77.7 $73.9 $54.6 $30.6
Income tax expense 56.1 27.5 13.8 1.3 18.0 21.3
Interest expense, net 19.2 31.0 33.4 32.1 25.2 22.1
Depreciation & amortization 83.0 67.2 59.5 52.3 43.1 37.0
EBITDA $396.7 $247.0 $184.4 $159.6 $140.9 $111.0
A Stock-based compensation 14.3 10.6 11.7 7.9 5.9 5.3
B (Gain) Loss on sale of assets (0.1) (0.4) 0.3 (0.4) 0.6 --
C Advisory fees -- -- -- -- -- 8.5
D Financing fees 0.7 -- -- 0.8 1.7 4.6
E Acquisitions, rebranding & other 3.5 3.0 4.7 8.1 8.1 4.9
F Adjusted EBITDA $415.1 $260.2 $201.1 $176.0 $157.2 $134.3
A Represents stock-based compensation expense recorded during the period.
B Represents any gain or loss associated with the sale of assets not in the ordinary course of business.
C Represents fees paid to CD&R and Deere for consulting services. In connection with the IPO, we entered into termination agreements with
CD&R and Deere pursuant to which the parties agreed to terminate the related consulting agreements.
D Represents fees associated with our debt refinancing and debt amendments, as well as fees incurred in connection with our initial public offering
and secondary offerings.
E Represents (i) expenses related to our rebranding to the name SiteOne, (ii) professional fees, retention and severance payments, and
performance bonuses primarily related to historical acquisitions. Although we have incurred professional fees, retention and severance payments,
and performance bonuses related to acquisitions in several historical periods and expect to incur such fees and payments for any future
acquisitions, we cannot predict the timing or amount of any such fees or payments.
F Adjusted EBITDA excludes any earnings or loss of acquisitions prior to their respective acquisition dates for all periods presented.
21Non-GAAP reconciliations
2022 Organic Daily Sales Reconciliation
2022 2021
($ in millions) FY’22 Q4’22 Q3’22 Q2’22 Q1’22 FY’21 Q4’21 Q3’21 Q2’21 Q1’21
Reported Net Sales -- -- -- -- $805.3 $3,475.7 $805.2 $936.4 $1,083.9 $650.2
A Organic Sales -- -- -- -- $760.1 $3,386.4 $772.1 $908.2 $1,057.7 $648.4
B Acquisition contribution -- -- -- -- $45.2 $89.3 $33.1 $28.2 $26.2 $1.8
Selling Days 252 60 63 64 65 253 61 63 64 65
Organic Daily Sales -- -- -- -- $11.7 $13.4 $12.7 $14.4 $16.5 $10.0
A Organic Sales equals reported Net sales less Net sales from branches acquired in 2021 and 2022.
B Represents Net sales from acquired branches that have not been under our ownership for at least four full fiscal quarters at
the start of the 2022 fiscal year. Includes Net sales from branches acquired in 2021 and 2022.
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