Download presentation
Presentation is loading. Please wait.
Published byAriel Johnston Modified over 9 years ago
1
Investor Presentation Robert Buck Chairman and Chief Executive Officer David Grace Chief Financial Officer Summer 2008 Financials for Q3 ended June 2008
2
1 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
3
Company Overview Robert Buck Chairman and Chief Executive Officer 2
4
3 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 176 branches across 35 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 2007 Sales of $1.65 billion (9-year CAGR 40%) FY 2007 Operating Income of $69.8 million (9-year CAGR 12%) FY 2007 Sales growth of 9.7%, organic contraction of 3.3% Successfully completed 17 acquisitions since 1997 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
5
4 Significant Strategic Accomplishments Key accomplishments since IPO Beacon successfully completed 11 strategic acquisitions since our IPO Opened 22 new greenfield locations since the IPO * Through fiscal 2007
6
5 March Across North America Today 1997 2001 2004
7
6 Comprehensive assortment of products for all external residential and commercial building needs Complete product offering 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 Revenue product mix 1 Residential roofing 41% Non-residential roofing 38% Complementary building products 21% 1 Reflects existing market net revenue for FY 2007 10,000 SKUs offered Selected relationships with manufacturers to achieve substantial volume discounts Re-roofing makes up approximately 67% and 79% of residential and non-residential demand* * source – Freedonia October 2006
8
7 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 9-year sales CAGR: 40% (1998-2007) CAGR internal sales growth since our IPO: 8.1% Strong EBITDA margins: 6.54% in 2007 Results-oriented management, corporate culture and controls
9
8 Large and Attractive Market U.S. roofing materials market 2005 Total = $12.7bn * Source: The Freedonia Group – October 2006 *represents sales by manufacturers $12.7 billion industry in the U.S. with a projected growth rate of 1.9% annually through 2010 Re-roofing (vs. new construction) accounts for approximately 70% of roofing expenditures Re-roofing makes up approximately 67% and 79% of residential and non-residential demand, respectively Roofing demand has grown every year since 1993 Grown through three years of declining building construction expenditures (1995, 2001, 2002) Almost two-thirds of the U.S. housing stock was built prior to 1980, with a median age of 30 years Overview Non-residential 35% Residential 65% Roofing market is somewhat insulated from swings in the overall building cycle
10
9 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: Global Industry Analysts
11
10 Re-Roofing Concentration Drives Stable Growth Construction Spending Growth by Category Source: Global Industry Analysts 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
12
11 Highly Fragmented Market is Ripe for Consolidation Source: IBIS World Pty Ltd. < 5% are regional Key Considerations Beacon is among the three largest roofing distributors 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 Total number of roofing distributors > 1,500 Roofing Distributors Market Share by Revenue Source: Company estimate
13
12 Strong Platform for Growth and Acquisitions New branch openings (e.g., Boston/ Houston) Existing market growth Acquisitions 1,500+ distributors + + = Potential average annual growth 2–5% 3 – 5% 10 – 15% 15 – 25% Targeted number: 6-12 locations per year Incremental sales effect: $12–25mm EBITDA impact: Typically breakeven in year one 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 Market plans by location Sales rep productivity Identify new prospects New product offerings 5–10% “organic” average annual growth potential Actual sales 9-year CAGR: 40%
14
13 Growth Through New Branch Openings Disciplined approach to new branch openings in contiguous markets Most branches opened by Beacon have been successful 31 branches opened since 1997, only one 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 22 branches have been opened since the IPO Others in location identification stage Branch managers have been identified Selective geographic expansion through new branch openings
15
14 Knowledgeable and Experienced Sales and Marketing Team 341 Sales and Business Developers 615 Branch Managers and Contractor Service Representatives 39 Manufacturer Representatives and Product Specialists Extensive coverage of/visits to local players Prospect for new customers while increasing sales to existing customers Manages contractor logistics including delivery and product placement Provides value-added technical advice and product knowledge Product specialists who liaise between manufacturers and contractors Instrumental in specifying Beacon-sold products in construction products
16
15 Existing Market Growth Significant opportunity to continue leveraging customer relationships to increase sales CAGR Organic growth since the IPO of 8% Strong track record of increasing the size and profitability of its customer base Over 4,000 new customers added in 2007 Over $66 million of incremental sales from these new customers in 2007 Diversified Product Base * Represents FY 2007 sales in U.S. existing markets
17
16 Acquisitions Come with Significant Synergy Potential Sophisticated Uniform IT Platform Beacon has a Highly Scalable Business Model Revenue Expansion Best Practices Large Operational Scale
18
Financial overview David Grace Chief Financial Officer 17
19
18 Significant sales growth Net Sales ($ in millions) 1999–2007 40% CAGR Fiscal years YTD 5.7% Growth
20
19 Operating Income ($ in millions) 1999—2007 12% CAGR Note: Operating income for pro forma 2004 excludes certain stock-based-compensation of $9.0mm. Fiscal years YTD 5.2% Growth
21
20 Margin Analysis Gross profit margin Operating income margin Note: Operating income for pro forma 2004 excludes certain stock-based-compensation of $9.0mm.
22
21 Financial Review ($ millions) (1) For a reconciliation of Adjusted EBITDA to Net Income, please reference our press releases dated November 28, 2007 and August 8, 2008
23
22 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 $151.4 million available at June 30, 2008, plus approximately $11.5 million in cash Conservative Capital Structure Strong free cash flow Net debt/equity ratio of 110% at June 30, 2008 Debt to Adjusted EBITDA ratio(1) of 3.31 to 1 as of June 30, 2008 Robust Financial Controls Systems integrated Sarbanes-Oxley compliant Disciplined financial approach Average bad debt expense of 0.3% of net sales over the past 5 fiscal years Minimal Capital Expenditures of Less than 2% of Sales $19.1 million in FY 2006, $23.1 million in FY 2007, $2.3 million in YTD 2008 (1) Calculated as defined under our credit facilities.
24
23 Financial Performance Objectives Average annual sales growth goal of 5%-10% (excluding acquisitions) Gross margin goals between 22%–25% Operating margin goals between 6%-8% Capital expenditures of less than 2% of sales
25
24 Beacon – A Company of Substance Culture Forecasting & Accountability Excellent Track Record Routines Benchmarking Fundamentals
26
25 Our Company Values and Culture
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.