SiteOne Landscape Supply, Inc. Q1 FY2025 earnings call

Unique Market Position - Has over 690 branches and 4 distribution centers across 45 US states and 6 Canadian provinces, with an 18% share of a $25 billion fragmented wholesale landscaping products distribution market. - Balanced business mix: 65% maintenance, repair and upgrade; 21% new residential construction; 14% new commercial and recreational construction. ### Strategy - Leverage scale, resources, and local teams to deliver superior value. - Organic growth initiatives: Increase bilingual branches, execute Hispanic marketing, improve sales force productivity via CRM, drive digital sales (siteone.com grew 140% in Q1). - Acquisition strategy: Completed 100th acquisition in March, with a robust pipeline of potential deals, focusing on filling product portfolio in Nursery, Hardscapes, etc. ### Q1 Highlights - 4% net sales growth, 6% adjusted EBITDA growth. - Price deflation moderated from -3% in Q4 2024 to -1% in Q1 2025. - Acquisitions added $20 million in trailing 12-month sales year-to-date. - Base business SG&A down 3% due to cost control actions in 2024.

SiteOne achieved 4% net sales growth in the first quarter. Organic daily sales declined 1% but was offset by 5% growth from acquisitions. Adjusted EBITDA increased 6% to $22.4 million. The product mix is 65% focused on maintenance, repair and upgrade, 21% on new residential construction, and 14% on new commercial and recreational construction. Agronomic products (including fertilizer, etc.) had 7% organic daily sales growth in Q1, while landscaping products (including irrigation, nursery, etc.) saw a 4% decline. Gross profit increased 3% to approximately $310 million, but gross margin contracted 30 basis points to 33% due to lower price realization and higher freight costs, partially offset by acquisitions.

End Markets - Expect end markets flat to slightly down in 2025. - New residential single-family completions roughly flat; new commercial construction steady; repair and upgrade down low single digits; maintenance end market expected to grow steadily. ### Sales Growth - Expect low-single-digit organic daily sales growth for 2025, supported by current sales volume trend through April. ### Adjusted EBITDA - Expect full-year adjusted EBITDA in the range of $400 million to $430 million, not factoring unannounced acquisitions. ### Pricing - Revised outlook for 2025 pricing is flat to up 1%, a 100 basis point increase from prior expectations.

• Macroeconomic uncertainties: Tariffs, inflation, and interest rates could negatively affect consumer confidence and end market demand. - Commodity price deflation: Continued moderation but still a factor impacting margins. - Labor costs: Wage inflation poses a risk to SG&A, though initiatives aim to offset this.

Q: Define and recent wins in DispatchTrack and focused branch efforts?

A: DispatchTrack helps track deliveries, with progress in driving delivery expense down as part of multiyear efforts to improve SG&A leverage. For focused branches, progress made in Q1 with overhead savings from Pioneer and focus branch consolidations/closures, with base business SG&A down 3%.

Q: Expectation for organic sales growth in Q2?

A: Think can hit low-single-digit organic growth in Q2, with price roughly negative 1% to flat in Q2.

Q: Tariffs and USMCA certification?

A: Suppliers have a mix of sourcing, not directly paying tariffs, but passing on price increases, with most price increases being single digits and impacting certain products like irrigation, lighting, etc.