Gms Group Co., Ltd. · TSE:544A
Gms — Investor Presentation (January 2017)
30 slides from Gms's investor presentation, Jan 25, 2017
Slide 1: Safe Harbor and Basis of Presentation
Safe Harbor and Basis of Presentation Forward-Looking Statement Safe Harbor - This presentation includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All of these forward-looking statements are based on estimates and assumptions made by our
Slide 2: GMS at a Glance
GMS at a Glance ($ in millions, April FYE) Other 22% #1 North American specialty distributor of interior construction products (1) More than 200 branches across 42 states 14.3% market share in wallboard 14.0% market share in ceilings $2,089 Steel Framing 15% $991 Ceilings 16% Balanced mix of commerc
Slide 3: National Platform With Local Presence And Independent Brands
National Platform With Local Presence And Independent Brands GMS has an integrated national platform, but operates through over 50 local brands that are highly regarded in their markets Branch managers are empowered and incentivized to run operations like entrepreneurs within parameters of the overa
Slide 4: Product Overview
Product Overview Primarily consists of complementary interior construction products, including joint compound, finishing materials, tools and fasteners, safety products and EIFS (exterior insulation and finishing system) #1 Market Position Suspended ceiling systems primarily comprised of mineral fib
Slide 5: A One-Stop-Shop for the Interior Contractor
A One-Stop-Shop for the Interior Contractor GMS Serves as a Critical Link Between Suppliers and a Highly Fragmented Customer Base - Specialty wallboard distributors lead the wallboard distribution channel with ~65% - Specialty distributors account for ~90% of ceilings distribution channel Steel Fram
Slide 6: Highly Attractive Industry Structure
Highly Attractive Industry Structure Number of North American suppliers declined from 12 in late 1990s to 7 today The top 4 represent ~76% of the market (1) Highly consolidated supplier base Average price increase of ~4% annually since 2007 (2) GMS maintains a strong, long-standing relationship with
Slide 7: Leading Specialty Distributor Poised for Continued Growth
Leading Specialty Distributor Poised for Continued Growth Market Leader with Significant Scale Advantages – #1 North American Distributor of Wallboard and Ceilings Differentiated Service Model Drives Market Leadership Multiple Levers to Drive Above-Market Growth – Market Share, Greenfields, M&A, Ope
Slide 8: Market Leader with Scale Advantages
Market Leader with Scale Advantages More than 200 branches across 42 states #1 position in wallboard and ceilings with approximately 14% market share, respectively National scale and leading market positions drive: - - - Purchasing advantage over smaller competitors Access to market leading ceilings
Slide 9: Differentiated Service Model Drives Market Leadership
Differentiated Service Model Drives Market Leadership reaching the end customer support, expertise, and sourcing entiated Weight And Delivery Requirements ce Model execution technology and equipment 10 Logistics Execution is Critical Given Reputation for best-in-class delivery Strong processes, sequ
Slide 10: Multiple Levers to Drive Growth
Multiple Levers to Drive Growth $184 Continued market share gains Greenfield branch openings Strategic acquisition opportunities in highly fragmented market FY-12 FY-13 FY-14 FY-15 FY-16 LTM Q2 17 End market recovery and expansion 14.3% 13.1% 9.9% Operating leverage Operational excellence 8.8% 8.6%
Slide 11: Strong Gross Margin Profile
Strong Gross Margin Profile Continued focus on growing profitability through market leadership, purchasing opportunities and price optimization $2,089 $1,162 $991 GMS gross margin growth largely independent of wallboard price GMS gross margin contribution diversified across product and end markets 2
Slide 12: Strong History of Market Share Gains
Strong History of Market Share Gains GMS Wallboard Market Share Significant Competitive Advantages: Scale and leading market positions drive competitive advantage 21.3% (4) CY2016 14.3% Breadth of product availability and access to leading brands and latest product innovations 21.7% (3) CY2015 13.1%
Slide 13: Attractive Acquirer with Significant Consolidation Opportunity
Attractive Acquirer with Significant Consolidation Opportunity Quarter Rationale Acquisition Industry Structure: Large, highly fragmented industry comprised of ~400 competitors Similar business operations enable efficient integration Limited number of scaled players One branch with LTM Sales of $12.
Slide 14: Significant Opportunity to Further Expand the Platform
Significant Opportunity to Further Expand the Platform GMS has a demonstrated history of successful expansion through greenfields and acquisitions GMS has no presence in just under 40% of the top 100 MSAs in the U.S. Significant opportunity for share gains in new and existing markets over time Canad
Slide 15: Capitalizing on Large and Diverse End Markets
Capitalizing on Large Poised for Continued and Diverse End Growth Markets End markets still well below historic levels (million square feet) 2,000 - New Commercial ~(44%) below prior peak (based on CY 2015) 1,500 - New Residential ~(44%) below prior peak (based on CY 2016) 1,000 500 - Significant R&
Slide 16: Entrepreneurial Culture And Experienced Leadership Driving Superior Execution
Entrepreneurial Culture And Experienced Leadership Driving Superior Execution Senior management averages over 25 years in the industry and over 20 years with GMS VPs of Operations across all seven geographic divisions have 30+ years of industry experience and have worked with GMS for 25+ years on av
Slide 17: Financial Highlights
Financial Highlights Proven track record of driving consistent above market growth and share gains Above-Market Growth Ability to deliver superior service and a comprehensive product suite Well positioned to capitalize on recovery in construction end markets Attractive End Market Dynamics Balanced e
Slide 18: Q2 2017 Highlights
Q2 2017 Highlights Net sales increased 29.2% to $591.8 million Base business net sales up 10.8% Wallboard unit volume grew 27.2% to 891 million square feet Above-Market Growth Net income significantly increased to $17.2 million Gross margin expanded 120 basis points to 32.6% Adjusted EBITDA grew 42.
Slide 19: Profitable Sales Expansion in Fiscal Q2 2017
Profitable Sales Expansion in Fiscal Q2 2017 ($ in millions) Fiscal Q2 YOY Grow th Base Business Adj. EBITDA ($ mm) (1) FY16 FY17 $50 Wallboard Volume (MSF) Wallboard Price ($/'000 Sq. Ft.) 700 306 891 303 27.2% (1.0%) 9.5% $40 $ $ $30 Net Sales ) $20 Wallboard Ceilings Steel Framing Other Products
Slide 20: One-Stop-Shop Outsized Impact on Other Products Sales
One-Stop-Shop Outsized Impact on Other Products Sales Net Sales ($ mm) 150.0 $140.4 100.0 Steel Framing Fasteners 50.0 Joint Compound Wallboard - Fiscal Q2 2016 Fiscal Q2 2017 Acquisitions Base Business 15.0% organic growth in net sales of Other Products, well in excess of 10.8% overall organic grow
Slide 21: Attractive Capital Structure
Attractive Capital Structure Leverage of 3.4x Net Debt / LTM Adj. EBITDA as of 10/31/16, continued improvement in credit metrics from 6.0x Net Debt / LTM Adj. EBITDA as of 4/30/14 and 4.3x as of 4/30/16 Substantial liquidity, with $16.4 million of cash on hand and an additional $168 million undrawn
Slide 22: Appendix
Unsaved Document / 2/6/2014 / 22:45 Appendix
Slide 23: Summary Quarterly Financials
Summary Quarterly Financials Note: Fiscal year end April 30. 24 (In millions, except per share data)1Q162Q163Q164Q16 (Unaudited) Wallboard Volume (MSF)681700646816 Wallboard Price ($ / '000 Sq. Ft.)$310$306$305$305 Wallboard$211$214$197$249 Ceilings79756578 Steel framing67706678 Other products959992
Slide 24: Quarterly Net Sales
Quarterly Net Sales ($ in millions) (Unaudited) Base Business (1) (2) Acquisitions (2) Total Net Sales Business Days (3) Net Sales by Business Day Base Business Branches (4) (5) Acquired Branches (5) Total Branches Note: Fiscal year end April 30. (1) When calculating our “base business” results, we
Slide 25: Quarterly Net Income to Adjusted EBITDA
Quarterly Net Income to Adjusted EBITDA Commentary A. Represents non-cash compensation expenses related to stock appreciation rights agreements B. Represents non-cash compensation expense related to changes in the fair values of noncontrolling interests C. Represents non-cash equity-based compensati
Slide 26: LTM Net Income to Pro Forma Adjusted EBITDA
LTM Net Income to Pro Forma Adjusted EBITDA Commentary ( $ in 000s) (Unaudited) 2Q17 LTM A. Represents non-cash compensation expenses related to stock appreciation rights agreements B. Represents non-cash compensation expense related to changes in the fair values of noncontrolling interests Represen
Slide 27: Quarterly Cash Flows
Quarterly Cash Flows ($ in millions) (Unaudited) Historical 1Q16 2Q16 3Q16 4Q16 FY16 1Q17 2Q17 Net income (loss) Non-cash changes Changes in primary working capital components: Trade accounts and notes receivable Inventories Accounts payable Cash provided by (used in) operating activities $ 3.0 (2.6
Slide 28: SG&A Adjustments Table
SG&A Adjustments Table Commentary (Unaudited) ($ in millions) A. Represents non-cash compensation expenses related to stock appreciation rights agreements 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 SG&A - Reported Adjustments Stock appreciation rights expense (benefit) Redeemable noncontrolling interests Equity-
Slide 29: www.gms.com
www.gms.com Unsaved Document / 2/6/2014 / 22:45
Slide 30: www.gms.com