SiteOne Landscape Supply Inc.

Overview Key strengths Key risks Nationwide footprint and large market share compared to direct peers, in a highly fragmented landscape products? industry. Narrow product range focused exclusively on landscaping supplies within the broader building materials? industry. Robust EBITDA margins of over 10% that compare favorably against other building materials? distributors Susceptible to discretionary spending levels. Though somewhat offset by the small ticket nature of its products. Adjusted leverage of 2x-3x along with strong cash flow generation supports inorganic growth initiatives. Seasonal swings tied to housing construction and adverse weather patterns. We believe SiteOne?s organic revenues will grow 5%-6% in 2022, driven by 1%-3% volume growth and balance from price realizations. In addition, we expect end-market tailwinds of increased spending for

...We expect demand and pricing conditions to remain favorable over the next two to three quarters, though cost inflation could cause some margin compression. We believe SiteOne's organic revenues will grow 5%-6% in 2022, driven by 1%-3% volume growth and balance from price realizations. In addition, we expect end-market tailwinds of increased spending for residential and commercial construction projects to drive volumes for at least the next few quarters. However, the company's ability to pass through rising costs for commodities, labor, and fuel would be key to its financial performance over the next 12 months. As a result, we do not expect price realizations achieved in 2021 to be repeated and expect some margin compression in 2022 to the extent that adjusted gross margins are 32%-34% (compared to 35% in 2021) and adjusted EBITDA margins are 11%-13% (compared to 14% for 2021)....

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