BrightView Holdings, Inc. (NYSE: BV) Investor Presentation - - PowerPoint PPT Presentation

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BrightView Holdings, Inc. (NYSE: BV) Investor Presentation - - PowerPoint PPT Presentation

BrightView Holdings, Inc. (NYSE: BV) Investor Presentation Inspiring people. Nurturing landscapes. Disclaimer This presentation contains forward looking statements within the meaning of the safe harbor provision of the U.S. Private


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Investor Presentation

Inspiring people. Nurturing landscapes.

BrightView Holdings, Inc. (NYSE: BV)

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SLIDE 2

Disclaimer

2

This presentation contains “forward looking statements” within the meaning of the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts, contained in this presentation, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends and other information, may be forward-looking statements. The forward-looking statements are not historical facts, or guarantees

  • f future performance and are based upon our current expectations, beliefs, estimates and projections, and various assumptions,

many of which, by their nature, are inherently uncertain and beyond our control. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable

  • words. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them.

However, there can be no assurance that management’s expectations, beliefs and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements. The forward-looking statements speak only as of the date of this presentation, and we undertake no obligation to publicly update or review any forward- looking statement, whether as a result of new information, future developments or otherwise. There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this presentation. Such risks, uncertainties and

  • ther important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth

under the heading “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere on our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”)

  • n November 28, 2018. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to

predict all risk factors and uncertainties. For a more complete description of risks and other uncertainties, please to refer to our Annual Report on Form 10-K as well as to our subsequent filings with the SEC. Included in this presentation are certain non-GAAP financial measures, such as Adjusted EBITDA, designed to supplement, and not substitute, the Company’s financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”) because management believes such measures are useful to investors. Additional information about these measures and a reconciliation to the nearest GAAP financial measures is provided in the appendix to this presentation. We are not providing a quantitative reconciliation of our financial outlook for Adjusted EBITDA to net income (loss), its corresponding GAAP measure, because the GAAP measure that we exclude from our non-GAAP financial outlook is difficult to reliably predict or estimate without unreasonable effort due to its dependence on future uncertainties. Additionally, information that is currently not available to us could have a potentially unpredictable and potentially significant impact on our future GAAP financial results.

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Cedars-Sinai Medical Center – Los Angeles, CA Inspiring people. Nurturing landscapes.

Company Overview

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BrightView: 70+ Years of Delivering Best-in-Class Service

  • Founded in 1939 by Theodore Brickman
  • Primarily landscape maintenance and snow

removal services

  • Strong national presence
  • Founded in 1949 by Burton Sperber
  • Provider of landscape maintenance and

development services

  • Strong evergreen market presence

Founded in 2014 Industry-Defining, Route-Based Services Company Strong Local Market Presence and Brand Reputation Large, Highly- Fragmented and Stable Addressable Market Consolidation Strategy Leveraging Resources and Scale Operational Improvements Driving Strong Margins

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SLIDE 5

We Provide Holistic Solutions Across the Full Spectrum of Maintenance & Development Services

1 FY2018 results represent operations during the 12ME 9/30/18.

Landscape Maintenance Landscape Development

FY’18 Revenue $2.35B1 Revenues: $1.77B1 75% of Revenues Revenues: $0.58B1 25% of Revenues Business Overview & Highlights

  • Commercial landscaping and snow removal services
  • Need-based, essential services business
  • Landscape architecture and development

services for new landscapes / large-scale redesign projects

  • Expands BrightView’s customer base
  • Horticultural thought-leadership
  • Complex and high-profile projects
  • Many contracts include ongoing maintenance

upon project completion

Selected Services

Landscape Services Snow Services Tree Care Services Irrigation Fertilization Disaster Recovery Landscape Architecture Nursery & Tree Moving Pool & Water Sports Fields

Selected Customers

5

Commercial Landscaping

  • Non-discretionary service
  • Predictable recurring revenue

model

  • Broad offering of ancillary

services Snow Removal

  • Counter-seasonal revenue stream
  • Utilizes existing infrastructure
  • Year-to-year variability,

modulated around 30-year avg. snowfall rates

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SLIDE 6

#1 Player in a

~$63B Market

~10x

Next Largest Competitor

Strong Margins and Free Cash Flow

~80% Cash Conversion

Modest Capex Needs

~2.5% of Revenue Robust M&A Pipeline

11 companies and more than $230 million in revenue acquired since 1/1/17

Our Breadth of Coverage Enables Us to Serve Customers Across the Country

National Footprint

States with BrightView Branches Extended Coverage via Qualified Service Partners Maintenance Location Development Location

Branches Employees Evergreen ~65% ~75% Seasonal ~35% ~25% Total > 200 ~ 20,000

Key Statistics by Region

6

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Consistent Execution of Complex Maintenance and Development Engagements

7

Pavilion Park Irvine, CA Beacon Park Irvine, CA Marlins Park Miami, FL ExxonMobil Headquarters Irving, TX Getty Museum Los Angeles, CA Duke University Durham, NC Four Seasons Hualalai Kona, HI Ritz Carlton Key Biscayne, FL Colonial Williamsburg Williamsburg, VA

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Toyota North American Headquarters – Plano, TX

Industry & Business Model Highlights

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~10x The Size of Next Largest Direct Competitor Industry Leader Across a Number of Service Lines Differentiated Scale in a Highly- Fragmented Market

Serves 4 of the 5 Largest U.S. Banks4 Contracts with 4 of the 5 Largest U.S. Companies5 Serves 9 of the Top 10 3rd Party Hotel Management Firms Serves 11 of the Top 15 Health Systems

Scope to Service a Diverse Set of End Markets

~13,000 Office Buildings / Corporate Campuses 9,000 Residential Communities ~3,400 Shopping Environments 450+ Education Institutions

High-Profile Bespoke Assignments

Turf Restoration for the National Mall Maintenance for Colonial Williamsburg Design Consultant for MLB Designed / Built Fields for 3 Olympic Games #1 Commercial Landscaper in the U.S. #1 Snow Removal Company in the U.S.2 Leading Tree Nursery3 Leading Provider of Golf Course Maintenance3 Leading Water Irrigation Service Provider3

#1 Provider of Commercial Landscaping Services…

Top 10 North American Landscaping Companies1

1 Per Lawn and Landscape magazine. Based on 2017 revenue. Excludes tree care focused companies. 2 Per Snow Magazine. 3 Per Management estimates. 4 Ranking based on total publicly reported assets. 5 Per Forbes, based on total revenues.

9

~10x

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…In a Large, Growing and Highly-Fragmented Commercial Landscaping Industry

1 Landscaping services in the U.S. (2006-2017), IBISWorld – Snowplowing Services in the U.S. (2014, 2016-2017) presents commercial landscaping services and commercial

snowplowing services as a share of the overall U.S. market at rates consistent with IBISWorld figures for 2017.

Commercial Landscaping and Snow Removal Services: Steadily Growing Industry

($B)1 $46 $48 $47 $44 $45 $46 $50 $53 $58 $61 $60 $62 $63 $64 $65 $67 $68 '06A '07A '08A '09A '10A '11A '12A '13A '14A '15A '16A '17E '18E '19E '20E '21E '22E

  • Stable growth due to non-discretionary nature of

service

  • Resilient revenue from focus on industry’s Top Quartile
  • BrightView is the only company with >1% market share
  • Growth supported by outsourcing and procurement

centralization trends

  • Quality demands drive engagement complexity and

criticality of execution

~$63B

U.S. Commercial Landscaping and Snow

BrightView: ~$1.77B Market Share: 2.8%

~$46B

U.S. Commercial Landscaping Services

MARKET OPPORTUNITY

CAGR: 0% CAGR: 3%

10

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Topline Benefits from High Retention, Limited Concentration and Low Relative Cost of Service

Recurring Maintenance Services

Anchor business that provides predictable recurring revenue and high degree of visibility on future performance (75% of FY2018 revenue)

Evergreen Sites

Significant presence in evergreen regions, which require year-round maintenance

Limited Customer Concentration¹

12% 88% Top 10 Customers All Other Customers

1 Reflects BrightView’s customer concentration based upon FY2018 revenue contribution. 2 Other includes: Hospitality, Hospitals, Education, Public Spaces and Other sectors. 3 Represents 2016 average operating expenses / sq. ft. per Building Owners and Managers Association International.

U.S. Private-sector Office Operating Expenses ($/ft)3

$5.21 $2.16 $2.07 $1.71 $1.43 $0.74 $0.23

Taxes Utilities R&M Cleaning Admin Security Grounds

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Stability of Business Model Amplified by Relative Low Cost of Landscaping Services

Nature

  • f Services…

No Customer >3%

37% 28% 35%

Other 2 HOA Corporate

Diversified Customer Base1

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Snow Services: Valuable Source of Counter- Seasonal Revenue and Employee Retention

 Efficient utilization of existing assets  High value-add to customers (combination with landscape)  Balanced mix of fixed price contracts with guaranteed

minimums (reduce year-to-year volatility) and upside from pay-per-plow contracts

 Additional tool for employee retention given year-round

demand U.S. Snowfall Amounts Modulate Around 10- and 30-Year Averages¹

1 Reflects cumulative annual snowfall at locations where BrightView has a presence. 2018 metric represents cumulative snowfall through FYQ1, FYQ2 and FYQ3.

Inherent Benefits of Snow Services Offering

  • Avgs. as of 9/30/18

10-Yr. 2,785” 30-Yr. 2,573” 12

1,000 2,000 3,000 4,000 5,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Cumulative Annual Snowfall (in.) Cumulative Annual Snowfall Rolling 10-Year Average

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Acquired¹

2Q’17 4Q’17 4Q’17 1Q’18 2Q’18 2Q’18 3Q’18 3Q’18 1Q’19 2Q’19 2Q’19

Location

Anaheim CA Sanford FL Vista CA Portland OR Dallas TX Danville CA Shamong NJ Tucson AZ Hartford CT Bay Area CA Austin TX

STRATEGIC FILTERS

Increase density

         

Develop underpenetrated geographies

   

Expand landscape enhancement business

      

Improve technical capabilities

   

Strong M&A Pipeline to Support Growth

“Strong-on-Strong” Acquisition Strategy 4,500+

Additional customer sites

> $230M+

in annualized revenue since Jan 1, 2017 Proven track record of identifying, purchasing at attractive multiples and successfully integrating M&A targets

We Have Resumed and Accelerated our Accretive M&A Strategy as a Leading Acquirer of Commercial Landscaping Businesses

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1 Represent BrightView’s fiscal quarters for the FYE 30-Sep.

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Andrew Masterman

President and Chief Executive Officer

John Feenan

EVP, Chief Financial Officer

Jeff Herold

President, Landscape Maintenance

Tom Donnelly

President, Landscape Development

Brian Bruce

EVP, Chief Information Officer

Todd Chambers

EVP, Chief Marketing Officer

Dan Dohar

EVP, Chief HR Officer

Jonathan Gottsegen

EVP, Chief Legal Officer

Long-Tenured and Experienced Leadership Teams

Proven Management and Experienced Local Leadership Teams

Senior Leadership Team

Position Number of Employees

  • Avg. BrightView

Tenure (yrs.)¹ Senior Vice President 15 19 Vice President 35 17 General Manager 12 16 Branch Manager 208 13 Assistant Branch Manager 62 11 Account Manager 724 8

1 As of 9/30/18 and including tenure with companies acquired by BrightView.

Brightview Management Combines Extensive Business Services Experience with Robust Local Landscaping Leadership

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Local Leadership Team

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Rose Fitzgerald Kennedy Greenway – Boston, MA

Growth Drivers

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Sustainable Future Growth Levers

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LEVERS FOR FUTURE GROWTH

GROW WALLET SHARE WITH EXISTING CUSTOMERS

Infrastructure and Technology in place to expand existing relationships

EXPAND CUSTOMER BASE

Capitalize on Multiple Channels to win new business

DRIVE OPERATIONAL ENHANCEMENTS

Center of Excellence initiatives driving meaningful cost reduction

EXECUTE ACCRETIVE M&A OPPORTUNITIES

Commitment to implementing our proven “Strong-on-Strong” strategy

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Leverage Dedicated Salesforce Selected High-Growth Market Opportunities Continue to Win Business from Regional Players Leveraging business development team of more than 160 salespeople solely focused on securing new customers Expanding footprint in selected high-growth geographies that exhibit favorable weather and economic characteristics Outgrowing regional competitors through targeted segmentation to take share in regional markets

Multi-Pronged Approach to Gain New Customers

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2 1 3

2.8% Market Share

CA

CA TX FL NC VA GA AZ

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Continue Operational Enhancements and Efficiencies

Center of Excellence Initiatives

Leverage Technology Align Executive/ Branch-Level Talent Streamline/ Centralize Procurement Standardize Quality Optimize Asset and Resource Mgmt.

$

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Intense

Customer Focus

Strong Leaders

Not Accepting Mediocrity Ready, Trained, Safe and Enabled

Crews

Superior

Financial Performance

Consistency in

Quality, Service and Productivity

Culture of accountability Rebranded fleet Leadership training and development programs Locally-led and empowered organization Client segmentation and optimization Strong-on-Strong M&A Strategy

1 BrightView maintains a 2.0 total recordable incident rate versus industry average of 4.5.

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Los Angeles County Museum of Art – Los Angeles, CA

2018 Financial Highlights

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Record Results in Fiscal Year 2018

20

  • Record Total Revenue
  • Record Adjusted EBITDA
  • Record Adjusted EBITDA margin
  • Record Cash Flow Generation

Revenue

∆ YoY

$2,353.6M

Up 5.7%

  • Adj. EBITDA Margin

∆ YoY (bps)

12.8%

Up 80 bps

  • Adj. EBITDA

∆ YoY

$300.1M

Up 12.6%

  • Maintenance Services
  • Revenue $1,774.8M – up 7.4%
  • Adj. EBITDA $289.8M – up 12.3%
  • Development Services
  • Revenue $583.3M – up 1.1%
  • Adj. EBITDA $78.7M – up 1.7%
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Fiscal Year 2018 Revenue Bridge

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(Numbers $M)

FY18 FY17 Commentary Total Revenue $2,353.6 $2,225.9

  • 5.7% Increase
  • Company Record
  • In-line with IPO Target

Maintenance Services $1,774.8 $1,651.8

  • 7.4% Increase
  • (+) M&A and Snow Removal
  • (-) Managed Exits

Development Services $583.3 $577.2

  • 1.1% Increase
  • (+) M&A and New Business
  • (-) Large projects
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Strong Balance Sheet and Free Cash Flow

22

1 Net capital expenditures excludes the acquisition of legacy ValleyCrest land and buildings for $21.6mm in 2017 and is net of proceeds from sale of property & equipment. 2 See the “Non-GAAP to GAAP Reconciliation” in the Appendix of this presentation for a reconciliation to the most directly comparable GAAP measure 3 Net Debt includes total long-term debt, net of original issue discount, and capital lease obligations net of cash and equivalents 4 Cash Conversion Rate is defined as (Adjusted EBITDA – Net Capital Expenditures) / Adjusted EBITDA

Net CapEx / Total Revenue: 2.2% in 2018 vs. 2.4% in 2017 Strong Net Income and Focus on Net Working Capital Net Debt / Adjusted EBITDA 3.8x at FYE 2018 vs. 6.1x at FYE 2017 Strong Adj. EBITDA Growth and Prudent CapEx Deployment

Capital Expenditures Adjusted Free Cash Flow Net Debt Cash Conversion Rate

$1,627.0 $1,149.2

FYE 17 FYE 18

79.8% 82.4%

FYE 17 FYE 18

2

$53.9

Net Capex

$52.8

Net Capex

$7.0 $12.0

FYE 17 FYE 18

$60.9 $86.4 $21.6 $70.4 $127.6

FYE 17 FYE 18

3 4

1 1

Asset Disposals Legacy Assets

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Fiscal Year 2019 Financial Guidance

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2019 Assumptions

  • Managed Exits: Expected to reduce full-year revenue by around $25M.
  • Hurricane Clean-up: Challenging revenue and Adjusted EBITDA comparisons related to

Irma (Florida) and Maria (Puerto Rico) in 1Q19.

  • M&A: Expected to contribute additional revenue of at least $75M versus the prior year.
  • Corporate Overhead: Higher expenses related to being a public company.

Total Revenue

  • Adj. EBITDA

Net Capital Expenditures

$2,400M - $2,470M

Predictable Drivers

$310M - $318M

Profitable Growth 10-30 bps margin expansion

~2.5% of Revenue

Long-Term Average Capital Allocation Priorities

Continue to Reduce Debt Pursue Value Accretive M&A

Target optimal long-term leverage Continue to consolidate attractive industry participants (“Strong-on-Strong”)

Invest in the BrightView Platform

Expect to improve current Capital Expenditures as % of Revenue

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SLIDE 24

Agnes Scott College – Atlanta, GA

Appendix – 2018 Non-GAAP Reconciliations 1Q 2019 Results and Non-GAAP Reconciliations

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Fiscal Year 2018 Non-GAAP Reconciliations –

  • Adj. EBITDA

25

(*) Amounts may not total due to rounding.

Three Months Ended September 30, Twelve Months Ended September 30, (in millions)* 2018 2017 2018 2017

Adjusted EBITDA Net loss $ (10.9 ) $ 0.4 $ (15.1 ) $ (37.4 ) Plus: Interest expense, net 20.3 24.7 97.8 98.1 Income tax benefit (8.1 ) (2.0 ) (66.2 ) (24.0 ) Depreciation expense 18.7 17.0 75.3 77.7 Amortization expense 15.3 31.0 104.9 125.8 Establish public company financial reporting compliance (a) 0.8 — 4.1 2.3 Business transformation and integration costs (b) 4.0 7.9 25.4 18.7 Expenses related to initial public offering (c) — — 6.8 — Debt extinguishment (d) 25.1 — 25.1 — Equity-based compensation (e) 8.0 0.3 28.8 2.9 Management fees (f) 11.0 0.6 13.1 2.6 Adjusted EBITDA $ 84.2 $ 79.7 $ 300.1 $ 266.6

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Fiscal Year 2018 Non-GAAP Reconciliations –

  • Adj. Net Income and Adj. Free Cash Flow

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(*) Amounts may not total due to rounding.

Three Months Ended September 30, Twelve Months Ended September 30, (in millions)* 2018 2017 2018 2017

Adjusted Net Income Net loss $ (10.9 ) $ 0.4 (15.1 ) $ (37.4 ) Plus: Amortization expense 15.3 31.0 104.9 125.8 Establish public company financial reporting compliance (a) 0.8 — 4.1 2.3 Business transformation and integration costs (b) 4.0 7.9 25.4 18.7 Expenses related to initial public offering (c) — — 6.8 — Debt extinguishment (d) 25.1 — 25.1 — Equity-based compensation (e) 8.0 0.3 28.8 2.9 Management fees (f) 11.0 0.6 13.1 2.6 Income tax adjustment (g) (17.5 ) (16.0 ) (103.1 ) (56.7 ) Adjusted Net Income $ 35.8 $ 24.2 $ 90.0 $ 58.1 Free Cash Flow and Adjusted Free Cash Flow Cash flows from operating activities $ 56.7 $ 55.3 $ 180.4 $ 124.2 Minus: Capital expenditures 14.7 9.9 86.4 60.9 Plus: Proceeds from sale of property and equipment 8.0 1.7 12.0 7.0 Free Cash Flow $ 50.1 $ 47.1 $ 105.9 $ 70.4 Plus: ValleyCrest land and building acquisition (h) — — 21.6 — Adjusted Free Cash Flow $ 50.1 $ 47.1 $ 127.6 $ 70.4

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Fiscal Year 2018 Non-GAAP Reconciliations – Footnotes

27 (*) Amounts may not total due to rounding.

(a) Represents costs incurred to establish public company financial reporting compliance, including costs to comply with the requirements of Sarbanes-Oxley and the accelerated adoption of the new revenue recognition standard (ASC 606 – Revenue from Contracts with Customers), and other miscellaneous costs. (b) Business transformation and integration costs consist of (i) severance and related costs; (ii) vehicle fleet rebranding costs; (iii) business integration costs and (iv) information technology infrastructure transformation costs and other.

Three Months Ended September 30, Twelve Months Ended September 30, (in millions)* 2018 2017 2018 2017

Severance and related costs $ 2.5 $ 0.8 $ 5.7 $ 6.9 Rebranding of vehicle fleet 0.1 5.6 12.5 6.3 Business integration 1.3 — 1.7 0.6 IT Infrastructure transformation and other 0.1 1.5 5.5 4.9 Business transformation and integration costs $ 4.0 $ 7.9 $ 25.4 $ 18.7

(c) Represents expenses incurred in connection with the IPO. (d) Represents losses on the extinguishment of debt. (e) Represents equity-based compensation expense recognized for equity incentive plans outstanding, including $19.6 million related to the IPO in the twelve months ended September 30, 2018. (f) Represents fees paid pursuant to a monitoring agreement terminated on July 2, 2018 in connection with the completion of the IPO. (g) Represents the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of the applicable discrete tax items, which collectively result in a reduction of income tax. The tax effect of pre-tax items excluded from Adjusted Net Income is computed using the statutory rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact of permanent differences and valuation allowances. Discrete tax items include changes in laws or rates, changes in uncertain tax positions relating to prior years and changes in valuation allowances. The twelve months ended September 30, 2018 amount includes a $43.4 million benefit recognized as a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the U.S. Tax Cuts and Jobs Act.

Three Months Ended September 30, Twelve Months Ended September 30, (in millions)* 2018 2017 2018 2017

Tax impact of pre-tax income adjustments $ 16.1 $ 14.3 $ 59.6 $ 55.3 Discrete tax items 1.4 1.7 43.5 1.4 Income tax adjustment $ 17.5 $ 16.0 $ 103.1 $ 56.7

(h) Represents the acquisition of legacy ValleyCrest land and buildings in October 2017.

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Fiscal 1Q 2019 Adj. EBITDA

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(Numbers $M)

1Q19 1Q18 Commentary Total Adj. EBITDA $50.1 $66.4

  • (24.5%) Decrease
  • 9.5% Adjusted EBITDA margin
  • 260 basis point contraction

Maintenance Services $48.7 $60.6

  • (19.6%) Decrease
  • 12.4% Adjusted EBITDA margin
  • 250 basis point contraction

Development Services $17.0 $20.5

  • (16.8%) Decrease
  • 12.7% Adjusted EBITDA margin
  • 140 basis point contraction

Corporate Segment ($15.6) ($14.6)

  • 6.6% Increase
  • (+) Public company expenses
  • (-) SG&A savings
  • Maintenance Services Segment

– Comparison with high-margin, Hurricane clean-up revenue in 1Q18 – Decreased snow removal contribution due to unusual timing and volume of snowfall

  • Development Services Segment

– Comparison with large projects completed in 1Q18

  • Corporate Segment

– Higher expenses related to being a public company

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Fiscal 1Q 2019 Revenue Bridge

29

(Numbers $M)

1Q19 1Q18 Commentary Total Revenue $526.0 $551.1

  • (4.6%) Decrease
  • (+) Acquisitions
  • (-) Managed Exits, Hurricanes & Snow

Maintenance Services $392.5 $406.7

  • (3.5%) Decrease
  • (+) Acquisitions
  • (-) Nat’l Accts, Mgd. Exits, Hurricanes & Snow

Development Services $134.4 $145.2

  • (7.5%) Decrease
  • Large project revenue comparison with 1Q18

and weather delays on current projects

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SLIDE 30

(in millions)* 2018 2017

Adjusted EBITDA Net loss (8.8) $ 19.3 $ Plus: Interest expense, net 17.1 24.9 Income tax benefit (3.1) (51.5) Depreciation expense 19.3 21.1 Amortization expense 15.1 31.0 Establish public company financial reporting compliance (a) 0.4 2.6 Business transformation and integration costs (b) 4.2 16.8 Equity-based compensation (c) 5.9 1.5 Management fees (d) — 0.6 Adjusted EBITDA 50.1 $ 66.4 $

Three Months Ended December 31,

Fiscal 1Q 2019 Non-GAAP Reconciliations –

  • Adj. EBITDA

30

(*) Amounts may not total due to rounding.

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Fiscal 1Q 2019 Non-GAAP Reconciliations –

  • Adj. Net Income and Adj. Free Cash Flow

31

(*) Amounts may not total due to rounding.

(in millions)* 2018 2017

Adjusted Net Income Net loss (8.8) $ 19.3 $ Plus: Amortization expense 15.1 31.0 Establish public company financial reporting compliance (a) 0.4 2.6 Business transformation and integration costs (b) 4.2 16.8 Equity-based compensation (c) 5.9 1.5 Management fees (d) — 0.6 Income tax adjustment (e) (6.4) (58.6) Adjusted Net Income 10.4 $ 13.4 $ Free Cash Flow and Adjusted Free Cash Flow Cash flows from operating activities 6.4 $ 82.5 $ Minus: Capital expenditures 17.3 29.8 Plus: Proceeds from sale of property and equipment 1.8 0.7 Free Cash Flow (9.1) $ 53.4 $ Plus: ValleyCrest land and building acquisition (f) — 21.6 Adjusted Free Cash Flow (9.1) $ 75.0 $

Three Months Ended December 31,

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(in millions)* 2018 2017

Severance and related costs 0.5 $ 2.6 $ Rebranding of vehicle fleet 0.3 10.2 Business integration 1.1 — IT Infrastructure transformation and other 2.3 4.0 Business transformation and integration costs 4.2 $ 16.8 $

Three Months Ended December 31, (in millions)* 2018 2017

Tax impact of pre-tax income adjustments 5.8 $ 18.1 $ Discrete tax items 0.6 40.5 Income tax adjustment 6.4 $ 58.6 $

Three Months Ended December 31,

(*) Amounts may not total due to rounding.

Fiscal 1Q 2019 Non-GAAP Reconciliations – Footnotes

32

(a) Represents costs incurred to establish public company financial reporting compliance, including costs to comply with the requirements of Sarbanes-Oxley and the accelerated adoption of the new revenue recognition standard (ASU 2014-09 – Revenue from Contracts with Customers), and other miscellaneous costs. (b) Business transformation and integration costs consist of (i) severance and related costs; (ii) vehicle fleet rebranding costs; (iii) business integration costs and (iv) information technology infrastructure transformation costs and other. (c) Represents equity-based compensation expense recognized for equity incentive plans outstanding, including $4.0 million related to the IPO in the three months ended December 31, 2018. (d) Represents fees paid pursuant to a monitoring agreement terminated on July 2, 2018 in connection with the completion of the IPO. (e) Represents the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of the applicable discrete tax items, which collectively result in a reduction of income tax. The tax effect of pre-tax items excluded from Adjusted Net Income is computed using the statutory rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact of permanent differences and valuation allowances. Discrete tax items include changes in laws or rates, changes in uncertain tax positions relating to prior years and changes in valuation

  • allowances. The three months ended December 31, 2017 amount includes a $40.5 million benefit recognized as a

result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the U.S. Tax Cuts and Jobs Act. (f) Represents the acquisition of legacy ValleyCrest land and buildings in October 2017.

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