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Page 1: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

September 2016

Page 2: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

2

Disclaimer

Forward-Looking Statements

This presentation contains “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-

looking statements may include, but are not limited to, statements relating to our 2016 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; general economic and financial conditions; weather conditions, seasonality and availability of water to end-users; laws and

government regulations applicable to our business that could negatively impact demand for our products; public perceptions that our products and

services are not environmentally friendly; competitive industry pressures; product shortages and the loss of key suppliers; product price fluctuations;

inventory management risks; ability to implement our business strategies and achieve our growth objectives; acquisition and integration risks;

increased operating costs; and other risks, as indicated in our final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as

amended, filed with the U.S. Securities and Exchange Commission on May 12, 2016 (Registration No. 333-206444).

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 interest

expense, net of interest income and excluding amortization of debt discount, income tax expense (benefit), depreciation, and amortization. Adjusted

EBITDA is further adjusted for stock-based compensation expense, related party advisory fees, loss (gain) on sale of assets and other non-cash

items, other non-recurring (income) and loss. Adjusted EBITDA does not include pre-acquisition 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 and capital leases is defined as long-term debt and capital lease obligations less cash and cash-equivalents.

Page 3: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

3

Company and Industry Overview

■ Largest and only national wholesale

distributor of landscape supplies

■ Approximately four times the size of

next competitor and only 10% market

share(1)

■ Large $16 billion highly fragmented

market

■ Serving residential and commercial

landscape professionals

■ Complementary value-added services

and product support

■ Approximately 100,000 SKUs

■ 468 stores in 45 states and five

provinces

Maintenance45%

New Construction

37%

Repair & Upgrade

18%

Balanced end markets (FY15)

(1) Source: Management estimates, Company data

Page 4: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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SiteOne Plays a Critical Role in the Professional Landscape Supply Value Chain

Thousands

of suppliers

Hundreds of

thousands

of customers

Large: ~28% of revenue

■ >$200K in avg. annual

purchases

Medium: ~54% of revenue

■ $10K – 200K in avg.

annual purchases

Source: Management estimates

Coast-to-coast

national network

Extensive

sales &

marketing

Rapid

product

launches

Fewer and larger

shipments

Broadest

product

offering

Superior

technical

expertise

Customer

loyalty

program

Trade credit,

sales leads

and training

SiteOne provides: SiteOne provides:

Critical business partner Small: ~17% of revenue

■ <$10K in avg. annual

purchases

One-stop shop

Page 5: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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We are the Only National One-stop Shop Provider of Landscape Supplies

Irrigation

Fertilizer

& Other

Control

Products Nursery

Landscape

Accessories Hardscapes

Outdoor

Lighting

% of 2015

Sales1 31% 24% 12% 16% 8% 5% 4%

Key Products

Key Suppliers

Market

Position2

(1) Excludes Retail & Other (<1% of sales)

(2) Source: Management estimates, Company data; Wholesale outlets only

#1 #1 #1 #1 #1 #1 #1

Page 6: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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Growth is enhanced by sustainable industry trends

Outdoor living Water and energy efficiency

■ Desire to increase usable living space, driving

demand for:

– Concrete pavers

– Bricks and stones

– Trellises and pergolas

– Outdoor lighting

■ Restaurants, coffee shops, bars adding and

enhancing outdoor areas

■ Drought driving demand for water-efficient

products

– Precision irrigation

■ Regulation driving increased drainage

requirements

■ Demand for “smart” water systems driven by:

– Conservation regulations

– Water conservation awareness

– Green movement

■ LED lighting fixtures save energy and reduce costs Source: Freedonia

Page 7: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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Accelerating performance and growth led by recent transformation

Deere strategy Right-sizing SiteOne Transformation

2001

Acquired McGinnis Farms

& Century RainAid

2007

Acquired

LESCO

■ Deere combined irrigation, nursery

and agronomic product lines under

a single distributor as John Deere

Landscapes

■ Created a national footprint

2015

Acquired ■ Shemin

■ AMC

■ Green Resource

■ Tieco

2014

New Management

Acquired: ■ Eljay

■ Diamond Head

■ Stockyard

■ BISCO

2013 (Q4)

CD&R acquired

60% of JDL

Strategy & Brand

Development

2005

Acquired UGM

■ CD&R acquired ~60% of JDL

■ New leadership

■ Strategy & brand development

■ Commercial & operational initiatives

■ Acceleration of small / mid size acquisitions

Source: Company data

2016

Acquired ■ Hydro-Scape

■ Blue Max

■ Bissett

■ New brand

■ Execution

■ Performance and growth

Page 8: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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SiteOne is poised for long-term growth and margin enhancement

Current Strategy

Leverage strengths of both large and local company

Superior value propositions to our customers

Fully exploit our scale

Develop and execute local market strategies

Close and integrate high value-added acquisitions

Entrepreneurial local area teams supported by world-class leadership

and functional support

Early innings of operational and commercial excellence

Pricing

Category management

Supply chain

Salesforce performance

Marketing

Page 9: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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Net sales1 Gross profit1

Adjusted EBITDA1, 2 Adjusted EBITDA less CapEx 3

1 Financial results exclude the impact of a variable interest entity (VIE) reported in the consolidated results for 2011 and 2012 (if VIE is included: net sales were $1,015M and $1,062M, gross profit was $304M

and $317M, and Pre-acquisition Adjusted EBITDA was $36M and $51M for 2011 and 2012, respectively)

2 Represents pre-acquisition Adjusted EBITDA

3 CapEx was $2M and $5M in 2011 and 2012, respectively

Our financial performance is accelerating

Denotes performance since new management

1,5491,452

1,1771,0781,027982

0

1,200

1,600

400

800

TTM

(7/3/2016)

2015 2014 2013 2012 2011

($ in

mill

ion

s)

472429

311290260243

30

24

500

400

300

200

100

0

33

21

27

TTM

(7/3/2016)

30.4%

2015

29.6%

2014

26.4%

2013

27.0%

2012

25.3%

2011

24.8%

% margin Gross profit

125

107

7468

42

25

15

10

5

0

150

120

90

60

30

0

6.3%

2013

6.3%

2012

4.1%

2011

2.5%

TTM

(7/3/2016)

8.1%

2015

7.3%

2014

% margin Adjusted EBITDA

113

96

7064

37

234

0

120

100

80

60

40

20

0

12

8

TTM

(7/3/2016)

7.3%

2015

6.6%

2014

5.9%

2013

6.0%

2012

3.6%

2011

2.4%

% margin Adjusted EBITDA - CapEx

Net Sales

TTM period

($ in

mill

ion

s)

($ in

mill

ion

s)

($ in

mill

ion

s)

Page 10: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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Second Quarter 2016 and Recent Highlights

Successfully completed IPO in May

Net Sales increased by 7% year-over-year to $513.4 million

Gross Margin increased by 220 basis points to 32.8%

Net income of $26.9 million includes $7.4 million of IPO and debt recapitalization costs

Adjusted EBITDA increased by 12% to $74.9 million

Completed two strategic acquisitions: Blue Max Materials and Bissett

Page 11: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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Second Quarter 2016 Financial Details

Financial Highlights

■ Net sales increased 7% year-over-year to $513.4

million

– Impact from strong pull-forward in Q1 2016

■ Gross profit increased 14% to $168.5 million

– Gross margin improved 220 basis points to 32.8%

– We continue to execute our operational and

commercial initiatives

■ Net income of $26.9 million

– Includes $7.4 million on an after-tax basis of IPO

and debt recapitalization costs

■ Adjusted EBITDA increased 12% to $74.9

million, reflecting our strong gross margin

improvements and contribution from

acquisitions

Net Sales ($M)

Gross Profits ($M)

Adj. EBITDA ($M)

Net Income ($M)

$513.4 $481.5

Q2 - 2016 Q2 - 2015

$168.5 $147.5

Q2 - 2016 Q2 - 2015

$26.9$33.2

Q2 - 2016 Q2 - 2015

$74.9$66.6

Q2 - 2015 Q2 - 2016

Page 12: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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Balance Sheet & Cash Flow Highlights

■ New capital structure put in place to support

growth including acquisitions

– New $275M 6-year term loan on April 29, 2016

– ABL facility upsized to $325M (5-year maturity) in

October 2015

» $176M in available capacity at the end of Q2 2016

» Seasonal swings funded by ABL facility

■ Excess cash flow used for investments and to

pay down debt

– No dividends for the foreseeable future

■ Target net debt / Adjusted EBITDA leverage of

2.0x – 3.0x

– Leverage ratio of 3.2x (2)

(1) Net debt is calculated as long-term debt plus capital leases, net of cash and cash equivalents on our balance sheet

(2) Leverage ratio = net debt (including capital leases) to trailing twelve months Adjusted EBITDA

For the three months ended July 3, 2016:

Net Debt(1) $397.3 million

Cash from Operating

Activities $2.2 million

Acquisition Spend $10.5 million

Capital Expenditures $2.5 million

Financial Highlights

Page 13: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

13

Acquisitions are a Key Part of our Value Creation Strategy

■ Strengthens our business

Geographic footprint

Product expansion

Market consolidation

Talent / capabilities

■ Significant synergies

Purchasing scale

Overhead leverage

Cross-selling

Branch network optimization

Commercial & operating best practices

Growth, margin

& cash flow

improvement

Strategic

acquisitions

Page 14: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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Year Target Location Strategic Rationale

2014

■ 9 locations in Western Canada ■ #1 irrigation platform in Western Canada

■ 3 locations in HI ■ #1 irrigation platform in Hawaii

■ 1 location in TN ■ #1 nursery position in Memphis metro

■ 5 locations in the Northeast ■ #1 irrigation position in Boston metro

2015

■ 30 locations in 18 major

metropolitan markets

■ Led to #1 nursery position in the Northeast, Southeast, Midwest

and Texas regions

■ 9 location in TX & OK ■ Led to #1 irrigation position in Texas

■ 5 locations in NC ■ Led to #1 position in fertilizer & control products in the Carolinas

■ 6 locations in AL & FL ■ Led to #1 irrigation position in Alabama & the Florida panhandle

2016

■ 17 locations in CA ■ Led to #1 irrigation position in Southern California

■ 5 locations in NC & SC ■ #1 hardscapes position in the Carolinas

■ 3 locations in NY ■ Led to #1 nursery position in Long Island & NYC

Robust Track Record of Acquisitions

Page 15: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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Recent Acquisitions – Continued Execution

Bissett

Closed in the third quarter of fiscal 2016

Leads to #1 nursery position in Long Island & NYC markets

Allows for full product line offering to local customers

Purchasing and fixed cost synergies

Cross-sell SiteOne breadth of products

Strong position in equipment and hardscapes

Existing SiteOne

Bissett

New York, NY

Page 16: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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Robust Pipeline of Opportunities Provides Accelerated Growth

A SiteOne is the only current industry consolidator

E Acquisitions are highly accretive and present significant profit growth potential

C Our pipeline is deep and rapidly expanding

B Significant sourcing advantage with 60+ associates scouting

D M&A team in place to execute larger pipeline

~10%

~90% Opportunity

Page 17: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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2016 Outlook

Underlying market trends remain positive

On track to achieve commercial and operational improvement targets

Forecasting strong sales and profit growth for the full year

Anticipate closing additional acquisitions in the second half of the year

Adjusted EBITDA expectation of $132 million to $140 million

Page 18: September 2016 - SiteOne Landscape Supply€¦ · 3 Company and Industry Overview Largest and only national wholesale distributor of landscape supplies Approximately four times the

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Investment Highlights

Proven management

team

Compelling and

sustainable

growth strategy

Uniquely

attractive industry Clear market leader

Value-creating

acquisitions

Operational and

commercial

excellence