Financials Q3 ended June
This presentation is the property of its rightful owner.
Sponsored Links
1 / 23

Investor Presentation Bob Buck Chairman and CEO Summer 2010 PowerPoint PPT Presentation


  • 54 Views
  • Uploaded on
  • Presentation posted in: General

Financials Q3 ended June 2010. Investor Presentation Bob Buck Chairman and CEO Summer 2010. Forward looking statements.

Download Presentation

Investor Presentation Bob Buck Chairman and CEO Summer 2010

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Investor presentation bob buck chairman and ceo summer 2010

Financials Q3 ended June2010

  • Investor Presentation

  • Bob Buck

  • Chairman and CEO

  • Summer 2010


Forward looking statements

Forward looking statements

  • This presentation contains “forward-looking statements”. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We caution you not to place undue reliance on forward-looking statements, which reflect our analysis only and speak only as of the date of this presentation, and you should refer to the “Risk Factors” section of our latest Form 10K. We undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances.

1


Investor presentation bob buck chairman and ceo summer 2010

  • Company Overview

  • Paul Isabella

  • President and COO

2


Beacon overview

  • Founded in 1928, Beacon Roofing Supply, Inc. has grown to be one of the largest distributors of residential and non-residential roofing materials in the United States and Canada

Beacon Overview

  • A leader in key metropolitan markets in the Northeast, Mid-Atlantic, Midwest, Central Plains, Southeast and Southwest regions in the United States and in Eastern Canada

    • 179 branches across 37 U.S. states and 3 Canadian provinces

    • Over 40,000 customers

    • Broad product offering of up to 10,000 SKUs

  • Strong long-term historical performance

    • FY 2009 Sales of $1.73 billion (10-year CAGR 30%)

    • FY 2009 Operating Income of $109.2 million (10-year CAGR 29%)

    • FY 2009 Operating margin of 6.3%

  • Successfully completed 12 major acquisitions since our IPO in 2004

  • Opened 25 new greenfield locations since the IPO


Investor presentation bob buck chairman and ceo summer 2010

March Across North America


Comprehensive assortment of products for all external residential and commercial building needs

Comprehensive assortment of products for all external residential and commercial building needs

Complete product offering

Revenue product mix1

1Steep Slope Roofing System

2Underlayment

3Custom Metals

4Substrates

5Wood & Vinyl Siding

6Flat Roof Systems

7Rigid Insulations

8Air & Vapor Barriers

9Pressure Treated Lumber

10Cavity Wall Air & Vapor Barrier Systems

11Doors & Windows

12Through Wall Flashings

13Expansion Joints

14Below Grade Waterproofing System

15Below Grade Drainage Systems

16Waterstop

17Concrete Sealers & Coatings

18Ground Barriers

Non-residential roofing34%

Complementary building products14%

Residential roofing52%

1 Reflects net revenue for FY 2009

  • 10,000 SKUs offered

  • Selected relationships with manufacturers to achieve substantial volume discounts

  • Historically re-roofing makes up approximately 70% and 80% of residential and non-residential demand*

*source – Freedonia April 2008


Why invest in beacon

High value-added distributor performing a critical role in the roofing supply chain

Market leader in an attractive, growing and fragmented industry

Highly scalable platform and proven business model with minimal capital expenditures

Superior financial performance highlighted by attractive growth and margins

Historical 10-year sales CAGR: 30% (2000-2009)

CAGR internal sales growth since our IPO: 4.1%

Strong EBITDA margins: 8.3% in 2009

Results-oriented management, corporate culture and controls

Why Invest in Beacon?


Large and attractive market

U.S. roofing materials market (SQS)

Overview

Large and Attractive Market

  • $15.0 billion industry* in the U.S. with a projected growth rate of 2.4% annually through 2014

  • Re-roofing (vs. new construction) accounts for approximately 70% of roofing expenditures

  • In 2009 re-roofing made up approximately 90% and 79% of residential and non-residential demand, respectively

  • The median age of the housing stock as of 2009 is 35 years old.

  • Roofing demand has grown every year since 1993

    • Grown through four years of declining building construction expenditures (1995, 2001, 2002, 2007)

Year of construction of housing stock, 2009 (129.5 million units)

Source: The Freedonia Group – March 2010 *represents sales by manufacturers

Roofing market is somewhat insulated from swings in the overall building cycle


Re roofing concentration drives stable growth

Re-Roofing Concentration Drives Stable Growth

Roofing Demand Compared to Interest Rates

  • Total roofing demand is very stable

  • Installed base of existing homes and commercial buildings is large and growing

  • Re-roofing is not a luxury expenditure, and it is not discretionary

  • There is virtually no correlation between interest rates and demand for roofing

Source: The Freedonia Group


Re roofing concentration drives stable growth1

Construction Spending Growth by Category

Re-Roofing Concentration Drives Stable Growth

  • Residential new construction activity has been volatile

  • Commercial new construction is also volatile and closely follows economic cycles

  • Demand for roofing, due to the large installed base of aging structures, remains very stable and consistent despite the construction cycles

Source: The Freedonia Group


Highly fragmented market is ripe for consolidation

Highly Fragmented Market is Ripe for Consolidation

Roofing Distributors

Key Considerations

  • Beacon is the second largest roofing distributor in North America

  • Although over 1,500 distributors serve the roofing materials market, fewer than 5% are regional

  • Consolidation driven by customer demands and needs

< 5% are regional

Market Share by Revenue

Total number of roofing distributors > 1,500

Source: IBIS World Pty Ltd.

Source: Company estimate


Strong platform for growth and acquisitions

Compelling customer-driven rationale for industry consolidation

Acquisition opportunities are identified and actionable

Highly fragmented market

Over 1,500 players

Long history of successful integration

Margin and revenue improvement

Scalable platform

Targeted number: 6-12 locations per year

Incremental sales effect: $12–25mm

EBITDA impact: Typically breakeven in year one

Strong Platform for Growth and Acquisitions

5–10% “organic” average annual growth potential

15–25%

10–15%

3–5%

2–5%

Acquisitions

1,500+ distributors

Potential average annual growth

Existing market growth

New branch openings(e.g., Boston/Houston)

=

+

+

  • Actual sales 10-year CAGR: 30%

  • Market plans by location

  • Sales rep productivity

  • Identify new prospects

  • New product offerings


Growth through new branch openings

Disciplined approach to new branch openings in contiguous markets

Most branches opened by Beacon have been successful

36 branches opened since 1997, only one of which has closed

Low initial investment: $600,000 – $1,000,000

Rapid breakeven – typically cash flow positive within one year

New markets are consistently being identified and evaluated

25 branches have been opened since the IPO

Others in location identification stage

Branch managers have been identified

Growth Through New Branch Openings

Selective geographic expansion through new branch openings


Acquisitions come with significant synergy potential

Acquisitions Come with Significant Synergy Potential

Revenue Expansion

Best Practices

Sophisticated Uniform IT Platform

Large Operational Scale

Beacon has a Highly Scalable Business Model


Investor presentation bob buck chairman and ceo summer 2010

  • Financial overview

14


Significant sales growth

Significant sales growth

Net Sales ($ in millions)

YTD 2010

Fiscal years

9.5% Contraction

2000–2009 30% CAGR


Operating income

Operating Income

($ in millions)

YTD 2010

Fiscal years

41.2% Contraction

2000—2009 30% CAGR

Note: Operating income for pro forma 2004 excludes certain stock-based-compensation of $9.0mm.


Margin analysis

Margin Analysis

Gross profit margin

Operating income margin

Note: Operating income for pro forma 2004 excludes certain stock-based-compensation of $9.0mm.


Financial review

Financial Review

($ millions, except EPS)

(1) For a reconciliation of Adjusted EBITDA to Net Income, please reference our press releases dated December 1, 2009 and August 5, 2010


Financially positioned to deliver on growth

Financially Positioned to Deliver on Growth

  • Ample Liquidity

    • $150 million U.S. revolving line of credit and CDN $15 million Canadian revolving line of credit, with initial term loans totaling $350 million, through October 2013

    • $159 million available at June 30, 2010, plus approximately $82 million in cash

  • Conservative Capital Structure

    • Strong free cash flow

    • Net Debt/Total capital ratio of 36% at June 30, 2010

    • Net debt to Adjusted EBITDA ratio(1) of 2.33 to 1 as of June 30, 2010

  • Robust Financial Controls

    • Systems integrated

    • Sarbanes-Oxley compliant

    • Disciplined financial approach

    • 2009 bad debt expense of 0.4% of net sales

  • Minimal Capital Expenditures of Less than 2% of Sales

    • $23.1 million in 2007, $5.7 million in 2008, $13.7 million in 2009

(1) Calculated as defined under our credit facilities.


Annual financial performance objectives

Annual Financial Performance Objectives

  • Long-term average sales growth goal of 5%-10% (excluding acquisitions)

  • Gross margin between 22.5%–24%

  • Operating margin between 6%-8%

  • Capital expenditures of less than 2% of sales


Investor presentation bob buck chairman and ceo summer 2010

Beacon – A Company of Substance

Benchmarking

Fundamentals

Culture

Forecasting & Accountability

Excellent Track Record

Routines


Our company values and culture

Our Company Values and Culture


  • Login