BrightView Holdings, Inc. (BV) Earnings Call Transcript & Summary

Good afternoon, and thank you for attending virtually the UBS Global Industrials and Transportation Conference. I'm Damian Karas from the UBS Electrical Equipment and Multi-Industry team. In this session, we'll be speaking with BrightView. Joining us from the BrightView team are Andrew Masterman, Chief Executive Officer; and John Feenan, Chief Financial Officer. Thank you very much, Andrew and John, for taking the time to speak with us. And for those listening who aren't familiar with the company, BrightView is a $2.5 billion in revenue and $1.5 billion market cap provider of commercial landscaping services. Andrew is going to start off with a brief overview of the company, and then we'll move to an interactive question-and-answer session. And with that, the floor is yours, Andrew.

Great. Thank you, Damian, and good afternoon to everyone on the call. It's great to be able to give you a glimpse into BrightView and look forward to your questions on perhaps giving you a deeper understanding of what we believe is a compelling and exciting story about the world's largest landscaping company out there. BrightView was brought together in 2014 with the merger of ValleyCrest and Brickman, the 2 largest industry players in landscaping industry in the United States. We're a U.S.-based, U.S.-only landscape maintenance and development company with about 3/4 of our revenue in maintenance and about 1/4 of our revenue in specialty installation services. In the maintenance side, it's sort of primarily a recurring revenue story, which -- we have over 21,000 people across the country dispatching every day servicing over 25,000 properties, doing everything from basic landscape maintenance to sophisticated irrigation, tree fertilization and general overall beautification on properties primarily that exist in the top end of the industry. The market itself is about an $80 billion market. That's the market for commercial landscaping and snow removal services. We're the #1 player in that industry at about, again, $2.5 billion of revenue, and the nearest competitor is 1/10 of our size. That puts us in a market share position of less than 3%. However, in a giant fragmented market, our story is a story of organic growth and acquisitions. It's a big roll-up position within the industry because of the fragmented nature. We believe we can grow at 2% to 3% a year organically and 2% to 3% acquisition-based, with a very attractive profile and pipeline of companies that kind of complement our footprint, which extends across the entire United States again. Overall, the business itself is a very steady and resilient business. In the recent quarter closed, we grew at about 2% organic growth, complemented by a very strong cash flow conversion rate off of earnings that we can get deeper into. In addition, we completed 2 significant acquisitions and continue to propel the overall shape of the business. Obviously, with the coronavirus impact that we've seen, we have had some impact on our revenue, and we do forecast a slight shrinkage in mid-single digits as we see the impact of coronavirus hitting ourselves across the country. That being said, in our maintenance group, and we have a position where we have only lost about 3% of our base contract revenue, that's in dollars. We have about a 97% retention rate of that revenue as we go into this period and dynamic where we have seen some softness in our hospitality and retail verticals. That being said, building off of that, we believe with the combination of a return to the normal economic activity, combined with regular pipeline in our development side of the business, we're very optimistic about where we believe we're going to quickly rebound in this overall environment. If you look at our overall strategy, it's a strategy which delivers a consistent, stable 4% to 6% top line growth with a slightly higher earnings stream coming in with productivity initiatives, driving a pretty stable 10 to 30 bp improvement year-over-year. That combined with the cash flow component makes us a compelling story, and we're very excited to share any further details on the many different paths that we can go within the overall organization.

Great. Thank you, Andrew. That was a very helpful introduction. [Operator Instructions] Maybe I'll lead off here with a few questions as we aggregate the incoming from the audience. Could you maybe just, I guess, walk us through a little bit more of kind of the progression of your business the last few quarters, kind of where things were before COVID-19 changed all of our lives? You talked a little bit about the impacts and sort of the maintenance business maybe kind of falling off 3%. But could you just kind of walk us through where you are now? And have you started seeing any signs of improvement?

Sure. If you look at prior to COVID, since the beginning of our fiscal year, which starts October 1 and actually slightly several months before that, we went on a deliberate and specific strategy of adding a stable of sales and business development professionals into the organization, working on establishing a greater organic growth trajectory. The investment in that marketing and sales personnel and approach to the market resulted in the beginnings of a roll of a couple of points of organic growth in the second quarter, which we actually thought would have been higher had the coronavirus not impacted us in the March period. That strategy was really off of a deliberate decentralized approach to engaging locally with landscaping customers throughout the entire country. As we looked at coronavirus coming in, we knew it would impact us to a certain degree. And while I said there is a resilience in our contract base, it did have an impact on our ancillary services. So in the maintenance segment, we have a base of contract, which is about 75% of the segment, with the other 25% being enhancement services that were impacted greater than the contract level. So that overall business mix where we believe there is resilience in contract, we actually have started to see some accounts, most notably in the hospitality and retail areas, starting to reapproach us to come back and build back the base that they had asked us to pause on during the initial start of the pandemic. Well, we don't see that necessarily any significant change to our overall kind of direction about where we believe the business is, which again is about a mid-single-digit decline, combined all in. That's the entire revenue base for the company, not just in the maintenance area. But as we see emerging shoots of green coming back into the business, we believe the build back of the maintenance should be coming back, building back some steam towards the middle end of our fourth quarter, which ends again in September and then into the winter months when we have the snow season that kicks in. In addition, our development business, which again is about 1/4 of our overall business, we did see some delays, primarily due to the fact that the municipalities had restricted our activities during coronavirus. Those restrictions have all been lifted. And our business continues to get back on to the sites that we are developing landscapes and only limited really right now by either weather, which has been quite cooperative so far in -- here in May, and potentially the ability of subcontractors or trades that are before us getting their work done. That being said, that's kind of a normal -- we're in a normal dynamic right now, and we would expect, after the third quarter, the fourth quarter to return to normal expected levels in our development business as we're fully booked for our fourth quarter. In addition, the layering in of new development projects, which happens about 6 to 9 months out, the cadence of that layering in seems to be in a regular pace. And our bookings for our fiscal first quarter starts in October and our fiscal second quarter starts in January are right at about where they were prior year. Of course, we're relooking at that keenly. But we feel that there is a robust pipeline that we're going to be able to fill, at least in the short term, as we enter that period.

Okay. Great. And I'm assuming you probably saw some stark differences regionally as you were kind of getting through that period, especially on the development side, where there wasn't much project activity going on. Did you see a pretty high correlation kind of with the lockdowns and your activity in the business?

Well, the lockdowns that affected development were primarily in the San Francisco Bay Area and the Boston, New York corridor. Those are the 2 areas. Part of that being is the quick actions that the Bay Area took relative to the pandemic and also in Boston and New York just due to the severity and the depth of the pandemic. Those were the 2 areas that most affected the development business. Likewise, the areas that were most affected by the coronavirus on the maintenance side were also in the Northeast corridor, so -- which obviously heavily populated and during the busy -- our busy April, May season with landscaping really coming into bloom in the spring put some pressure -- has put some pressure into the overall organization. So those were the prime areas, I would have -- the primary areas. I would have to say that the areas that seem to be coming back quicker or at least -- or have less of an impact tend to be what we see in our evergreen markets, particularly in the Southeastern part of the United States.

Okay. Got it. Could you talk to us a little bit about your supply chain, I guess, just first, maybe more generally, how it's structured? And then has that held up fairly well? Or have you seen any supply chain challenges during this period?

Damian, this is John. I'll take that question. For the most part, our supply chain is really -- we've seen essentially minimal, if any, disruptions. Why is that? We have a broad breadth of suppliers with a company of our size. Some of them are nationals in scope, and we have extremely good relationships with those national suppliers, like Ford for our fleet of trucks, Exmarks for our mowers. But then a lot of our supplies come regionally as well, regional mulch suppliers, regional flower suppliers, national suppliers with different irrigation products. And in our working capital, if you look at our results in the second quarter, our cash flow was quite strong through the second quarter and the first half of the year. I want to point out that, that cash generation was not done on the back of our suppliers. We've done a very good job managing our AR. And so we maintained very good relationships with those suppliers and have seen minimal disruptions and, quite frankly, don't expect any going forward.

Okay. That's really helpful, John. And I guess for industrial investors that might be a little bit less familiar here with the landscaping service market, Andrew, you had highlighted before, I think, steady and resilient were the words you used to kind of describe the business. And you also mentioned that sort of ahead of the coronavirus, you were really focused on augmenting your organic growth profile. I guess just what do you see as kind of the key drivers of your kind of growth outlook sort of longer term? Is it kind of a GDP grower? Or how do you think about it?

Yes. The landscaping industry in general is a very stable, steady business that is not necessarily correlated to the overall economy. There is a bit of the enhancement to our ancillary services that come in into play with -- and some of those ancillary services are discretionary spends, some of them are not discretionary in ancillary services. Things like fixing an irrigation system or picking up tree limbs that fall off of trees, those are not discretionary. You don't know when they're going to happen, but they are part of our ancillary side of the business. The majority of business, though, is landscape contract maintenance, which, regardless of whether the economy is good or the economy is bad, you need to continue to maintain the overall environment that we're in. So that business stays relatively resilient and stays pretty stable. But the overall industry only grows at about 1% to 1.5%, kind of in that range. So it's a fairly steady business and even in this recessionary environment, it doesn't contract near to the amount that necessarily the economy or other businesses contract at. And we saw that in the 2008, '09, '10 time period, where peak to trough was less than 10% of the overall revenue in the industry. And we would believe that was in the worst economic situation that obviously we've all seen in the last 50 years. And we believe that in a similar environment today, again, we're going to kind of see a steady drumbeat. It's more driven also by the new expansion of properties in suburban areas or growth areas of the country and less from -- obviously, from any downtown construction or construction indices. We tend to grow as properties improve, put landscaping and exterior environments as a priority. And we actually believe in the current type of environment where more and more people are going outside and tend to want to be outside rather than being cooped up in their house, that's going to actually stimulate some longer-term kind of development of overall landscaping in the country.

Okay. That's very helpful. And that 1% to 1.5% that you mentioned, is that kind of the overall market? And I guess kind of the -- how would you think of sort of the maintenance versus the development in terms of the organic growth in those respective pieces that you would aspire for?

Yes, that 1% to 1.5% is really the landscape maintenance and snow removal market. So it's an $80 billion market, grows at about 1% to 1.5%, which again is about 3/4 of our business. The remaining 1/4, the landscaping development business, actually is -- grows in a kind of a similar trajectory, kind of in that very -- in low single digits, but comes a little lumpier because sometimes very large projects kind of finish or come into the pipeline. All that being said, it has -- the $80 billion market is only the maintenance and snow removal. The market for development is a different number. And there is no publicly developed information on the size of the [ landscaping ] development market, but it's still multiples of billions.

Okay. That's helpful. And then I guess, just thinking about your customer base, maybe you could sort of give us a sense, are these mostly large institutions or what does your kind of customer mix look like?

Yes. So in the $80 billion market, we kind of focus ourselves in the top quartile. So if you take the $80 billion, you split it in half and split it in half again, it's at upper quartile of the pie. We're focused on those kinds of properties which have an interest in really sharp, tight landscape management, want to keep their properties looking as good as possible and use landscaping as a element of attracting either customers or residents to their different properties. So if you look at our profile, our largest vertical, somewhere between 40% and 50%, is homeowners associations, where we're going on and not necessarily doing the properties of the individual houses because we only do commercial. But we're doing the common areas, the entrances and the clubhouses and things like that around those homeowners associations. Our second vertical is in the commercial segment, which is the multiple offices and corporate headquarters, larger, more sophisticated companies around the country. And you go down the list of the Fortune 500, we're doing over half of those corporate headquarters around the country and the maintenance around -- the annual maintenance that takes to make those places really the showcases where those employees work as well as where customers come to visit. You then keep going down, whether it's hospitals or universities or retail establishments or whether it's the hotels, like the Four Seasons or the Ritz-Carlton hotel chains, or whether it's universities, like Duke University or Harvard University, we're doing development of landscaping where it makes a difference. When you enter into a university, it's the landscaping that jumps out first and introduces you to that property. When you enter into a mall, it's the landscaping which pulls you into that mall to be able to show you that this is a place where you want to be. And especially in the outdoor-type of new mall developments that exist and will continue to be places where people gather, landscaping becomes more important. Those kinds of properties where we focus on and where we find we do the best in. We have a relatively high level of engagement and people model. So we have account managers who work directly with the properties and the properties that actually have a degree of interest in making sure that their landscaping stays at a very high level of performance and maintenance so that it has that impact on people when they come into the property.

Understood. Okay. And I guess thinking about some of these higher profile, these national customers, if you will, do you find that they are sort of using a mix of services -- service providers, like yourself, and maybe some other landscape servicers out there in the market? Or are they -- do they tend to exclusively rely on BrightView?

Yes. I mean that's absolutely one of the strengths we bring is that when you work with BrightView, you're actually working with an in-house provider of landscaping services, where we perform all the business. In most every case, when you work with BrightView, it's a BrightView person who's doing the landscaping itself, plus it's a BrightView person doing irrigation, the BrightView person doing the fertilization and the BrightView person doing the tree care. We have all of those different service lines which we self-perform to make sure there's consistency in what we actually deliver. And so it's by and large, across the entire country that we're able to service those, I'd say, in most geographies that we're in. So by being able to tackle and harness all the different elements of the landscape, we're able to give that kind of sticky cross service line attention to make sure that the properties get the kind of care and also beauty that we can actually deliver into the property. As opposed to many of our competition, they may not have a tree care group, they may not have the depth of irrigation that we have. They might not have the ability to fertilize properties, be able to look at the turf and understand the dynamics around turf and able to react in the multiple different ways. It's a differentiating factor within BrightView because we can deliver all of those services under our umbrella. And we're continuously looking at other services that we might be able to add to complement that as we go forward because there are exterior services outside of landscaping, which might also complement the basic landscaping that we do.

Got it. And I guess in terms of your relationship with these customers, how does that work? Contractually, do you have sort of longer-term service agreements in place? Or is it kind of more open-ended and just kind of on a more seasonal demand basis? But I guess the sort of the more predictable recurring revenue stream, which you talk about, is just the fact that, that demand kind of holds pretty steady year in, year out and regardless of whether you sort of have a contractual arrangement in place?

Yes, yes. The contracts that we have, we -- are annual or multiyear in nature. Many times, we -- something John and I have pushed the organization in over the last several years is to go into 3-year agreements rather than just annual agreements. And those are annual, monthly based recurring kind of month in, month out for -- again, over 75% of the business in the maintenance side. So it does give you a consistent look, a consistent feel to how that comes in and it's contract-based. So it's not necessarily there are routes that we run, but it's -- the routes tend to have visits. There might be 1 to 3 properties a day and -- in some properties, where we're the sole landscaping group in a very large property, we're the only company on the property and might have a dozen people who just reside at that particular property every single day.

Okay. That makes sense. And then thinking about your efforts to kind of take on more market share, organically speaking, are there any sort of, I guess, kind of incentives or any sort of kind of scale benefit pitch that you might offer as you're attempting to kind of win some new customers? Or is it more just kind of the value proposition that you're trying to bring to the market on being able to offer this comprehensive kind of solution?

Well, so if you let me unpack that a little bit. So there is a part of the market that has an aggregated buy of landscaping services. These tend to be very large networks of properties around the country under a single brand. If you think of like a Lowe's home improvement store or Home Depot or a chain of restaurants or hotels might contract in the centralized procurement model. We work with those customers on that centralized procurement. There might be a bank network throughout the country that has multiple banks and they do that central procurement model. Actually, in landscaping, that's a very small portion of the overall market. It is -- most landscaping is not centrally procured, it's actually a local decision. It's one made by local property owners, property managers, and they work with local teams. That's why we decentralize our business, and we operate as a local entity in those local environments. We give a great deal of autonomy and decision-making to our branch managers, the 250 or so throughout the country, to be able to work more specifically with those property managers in those properties that are in that, we call it, locality. Now what BrightView brings unique to any other company, because of our national footprint, are several things. Number one, we can attract and retain the best in the whole industry. We're the only company that has a distinct and specific and recurring leadership training initiative, whether that comes as a new account manager who's out of college all the way up into general management of multi-branch markets. And there are steps in the way, whether it's account management or branch management and different skill sets that you develop, whether it's negotiating new contracts, dealing with difficult people, managing group sizes, understanding P&Ls, understanding people management. That whole sequence of leadership development BrightView brings to the table and, thus, attracts and retains and has the best people in the industry. Secondly, because of the presence we have. In some markets, we might have a dozen branches. And that route density that we can actually bring to the table allows us to have a better cost profile and the ability to service multiple sites in a single geography and have shorter dispatch times to those properties, allowing us to quickly manage those properties without having to have hours behind the wheel of a truck going across potentially a very congested metropolitan area. There are other benefits. Obviously, the ones that stand out, and I think John addressed them earlier, are supply chain, purchasing benefits we have throughout, our buying power in the relative overall landscape market. And also, as you look at -- and this is in no way means the last one, but I do want to emphasize this, is our safety record and our ability to only deliver e-verified employees throughout the whole country. Because every employee we have that has joined the company since we went public or even before then is e-verified, legal rights to work in the U.S. and goes under a very distinct and differentiated safety protocol that we continue to follow, which leads us to be unquestionably the safest landscaping company out there. Our incident rate is half that of the standard for the industry for the -- for incidents that occur. So some of those differentiating factors really put BrightView in a very competitive as well as preferred, say, when it comes to potential clients that we're working with throughout the entire country in all the verticals we operate.

Okay. Interesting. That's very helpful. Maybe just moving to the other side of the growth equation, the inorganic opportunity, which you mentioned is also an important part of your strategy. Could you just talk about kind of your M&A framework and your process internally for deals?

Yes. That's a good question. This is John. I'll take that question. We -- when Andrew and I came on board in 2016, we spent the first year or so kind of cleaning up and tightening up several of the processes before we really started on the inorganic or the acquisition front. We got the green light in late '16 from our Board. And since that period of time, we probably looked at about 150 to 200 different companies in the industry. We have consummated 19 transactions in that period of time, and we think it's a key part of our strategy. With the cash-generative nature of the business, we've been very consistent in that we're going to use that cash to pay down debt, because we realize as a public company, we want to get our leverage ratio down closer to 3. And the other uses is accretive acquisitions. Our strategy is super simple. It's strong on strong. We don't buy turnarounds. We don't buy broken companies. We don't buy distressed assets. These, for the most part, are well-run companies. We have a very good lean internal team, where we do our integration relatively quickly. Each deal is a little bit unique just because of the nature of the industry. And because of the fragmented nature of the industry, the average size of these deals is usually somewhere between, call it, $20 million to $25 million. We have done a few that are at least 2x that. But in the nature of our industry, we're 10x bigger than our nearest competitor, then there's a tranche of probably 10 to 12 companies that are in the, call it, $100 million to $250 million range, and then it drops off. As far as valuation, again, we're quite disciplined in our approach. We're not going to overpay. We've been able to consummate our transactions in the 5 to 7x range of EBITDA, and that's pre synergy. And then it takes about 12 to 18, maybe 20 months to get these businesses running up to the status of what we do in the maintenance side. So that's a quick overview of our M&A program and the process.

Okay. That's very helpful. And I guess, just a lot of the smaller companies that you're buying, I'm assuming you've got a lot of family-run businesses. I mean how does it work in terms of the transition? Does staffs pay on board? Or does BrightView sort of kind of move in and restructure everything immediately? Kind of just how does that sort of integration on your acquisitions play out, typically?

Yes. It's a very good question. Each deal is unique. Some folks say day 1, look, I don't have a succession plan. I want the cash, and I'm going to go. Others, it's very liberating because they see an opportunity to maybe do something in a $2.5 billion company that they couldn't do in a $20 million or $30 million company, and we give them that opportunity. We have several cases -- Andrew mentioned the strength of our bench with our top 50 leaders having an average length of service of 17 years with the company. We have several individuals that are running $100 million plus regions that came from an acquisition that have been with the company for a long time. But I think each deal is unique in the regards that you're dealing with individuals. And I think at the end of the day, without a doubt, we're the buyer of choice. And we're the buyer of choice for 2 reasons, one obvious, one not so obvious. The obvious one is we use our internal cash on the certainty of closure, and we can close very quickly. The second one, a little bit less obvious, is most of the sellers because of the nature of the industry, they have a high -- not all of them, but most of them really care about their employees. This is a people business. We have north of 20,000 employees, and that interaction with the customers is critical. But we give that seller something that no one else in the industry can give them, and that's the opportunities under our domain of all the services that we offer, whether they want to go into irrigation, whether they want to become an arborist, whether they want to be on the architectural side, whether they want to run a tree business, whether they want to run a branch, whether they want Andrew's job, whether they want my job. We give them that plethora of opportunities in a $2.5 billion company for their employees, for that seller's employees that he or she could never give them in a $20 million company. And that really, when you get that owner, when Andrew or I get in front of that owner and have that discussion, we have an extremely high closure rate.

And there are some great examples of some leaders. There's a lady who joined us, who was a branch manager in one of our acquisitions who -- within 2 years, she's now a VP and General Manager and running a 5-branch market for us. We have an example of a fellow who was a CFO over one of our acquisitions, who's now running a $50 million business for us. We have an example -- I can keep going on people who joined the business from acquisitions, who end up taking leadership roles that they never would have had the opportunity of being able to run and lead groups of people and business had they remained with their prior structure and size of the company.

That's really great. I guess how are you guys thinking about your pipeline? How does that look? I think you threw out the number that you at some point were kind of looking at 150 possible deals and you've done 19. Have you been nurturing that pipeline through this kind of pause period? And how are you thinking about sort of the timing of the resumption of deal execution at this point?

So the pipeline remains robust. We have over $300 million of revenue in our pipeline of acquisition deals. Now those are pipeline. They're almost closed. And they don't -- many deals go to the pipeline, go out of the pipeline because we're very selective. As John said, we looked at 150 plus, 200 acquisitions over the last 3.5 years. And we continue to, every single month, really review and prior to COVID, we were out in the field looking at deals almost every other week, just trying to kick the tires, meet the principles. It's so important to meet who the people are that you're buying the business from to understand because when you do a deal, you're buying people in the business and you're buying the customers. That's really the 2 things you're buying. So you're really -- being able to engage personally becomes a very important thing. That deal pipeline has not dried up. It continues to be quite strong, and there are new companies being added to it. And even since coronavirus started, new deals have come into the pipeline, and we are in discussions over the phone with those companies that as soon as we can kind of feel comfortable getting back on the road, we'll be opening those doors up. And there are several deals that were in prior that we already met with, that are continuing to work their way through the pipeline. We believe that, well, this -- our fiscal third quarter, again, which ends in June, is going to be a slower quarter for us. We don't anticipate doing any acquisitions this quarter. With the pipeline and with the progress we're making, we would expect in Q4, Q1, those acquisitions starting to resume.

Okay. Great. We're running down to our last couple of minutes here, but I do have a -- 2 operating questions here that came in, maybe you could just kind of briefly answer each. The first one is on margins, and it's just how do you usually think about incremental or decremental margins for your business? And is there a sort of a margin, I guess, longer-term target that you have in sight? And then the second one is on free cash flow. You did speak before about you have solid cash flow. But do -- is there a conversion ratio that you target? And do you see any opportunities for improvement?

Yes, this is John. I'll take both of those, and I'm sure Andrew will have some comments as well. On the margin -- I'll start with the margin. We publicly stated that we feel on an annual long term -- not an annual basis, long-term basis, that we can grow the margins 10 to 30 basis points. How do we get there? There's no silver bullet. It's a lot of incremental things. It's managing the business with certain pricing expectations related to our contracts. It's managing the business with a heavy emphasis on our ancillary business, which tends to have a more profitable nature to it than the straight contracted business. It's managing our supply chain. It's -- going back to your first question, one of your initial questions and how we can leverage our scale and do things there. It's managing our labor force. We've instituted tools, such as electronic time capture, which gives us tremendous visibility down at the local branch of how they manage their largest cost element, which is labor. Labor tends to run somewhere between 35% and 40% as a percentage of revenue for each branch. So that is a real benefit having that daily visibility that we didn't have 3 or 4 years ago. And it's just a host of different things, how we can procure, the safety is an element, right, making sure that the people are efficient and we're not wasting time. So there's a whole host of different elements where we feel that we can get somewhere between 10 and 30 basis points a year. But we feel confident about that. But again, it's a lot of initiatives across a lot of fronts. And that's on both the development side and the maintenance side. As far as the cash generation and the free cash flow, I would tell you that we had guidance in the beginning of the year, but obviously, with COVID, we withdrew our guidance. So it all starts with our EBITDA. But if you look at the components of our free cash generation, we really have a really good visibility and a solid handle on the majority of them. I'll start with capital. We like to characterize this business as low capital intensity, somewhere around 3%. And Andrew and I are both intimately involved in managing that. Our working capital, the next component of our cash generation, we define that -- we keep it really simple because we like to drive it down at the branch level. There's 3 components there: our inventory, which is very small for a business of our size, less than $30 million, so that whole risk profile comes off the table for the most part; our payables, which are managed centrally; and then our AR. And we're -- we've done a very good job in managing in AR, and we have very, very little credit risk on that side. Our interest expense is pretty straightforward, and we've discussed what we expect there. We had guided to around $70 million of interest expense this year. And then we make money, so there's cash taxes and we had guided somewhere around $30 million to $35 million this year. When you take that all out and you go back and look at what we think we can generate on the EBITDA, this is a business that will -- has consistently generated free cash generation north of $90 million to $100 million per annum. We did about $110 million last year on $305 million of EBITDA. And again, that cash is going to be used to pay down debt and do accretive transaction. So I would classify that cash is stable and consistent free cash characteristics.

Okay. So a lot of information. Unfortunately, we are out of time. So Andrew and John, I don't know if you have any closing remarks that you'd like to make?

Yes. No, I just want to emphasize that our business here is a stable, consistent, reliable company. And I think we're seeing it through in these times of quite a bit of uncertainty. And with the cash profile, it provides a compelling investment to be able to look at, over time, a company which will give a platform of recurring revenue-based strong mid-teens EBITDA-type performance. So the quality of earnings being a really strong player in a company that has an incredible bench of very talented people. It's a unique opportunity. There are no other public landscaping companies. And so what we do is provide a great investment that perhaps isn't correlated to a lot of different other things out there and provides an investor a unique entry into something which can be pretty compelling over the long term.

Great. Well, we appreciate both of you being here to speak with us. And thanks to everyone listening on the line for joining us today. Have a great evening, everyone.

Thank you.

Thank you, Damian.