Simpson Manufacturing Company, Inc. · NYSE:SSD
Simpson Manufacturing — Investor Presentation (March 2019)
27 slides from Simpson Manufacturing's investor presentation, Mar 20, 2019
Slide 1: Strength Built In
Karen Colonias CEO Brian Magstadt CFO STRENGTH BUILT IN March | 2019
Slide 2: Safe Harbor
Safe Harbor This document contains forward-looking statements within the meaning of the 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 (the “Exchange Act”). All statements rel
Slide 3: Company Overview
Company Overview Simpson Manufacturing Co. designs, engineers and manufactures structural connectors, anchors, software solutions and other products for new construction, retro-fitting and do-it-yourself markets Wood Construction Products Concrete Construction Products Simpson Manufacturing Co. oper
Slide 4: Global Presence
Global Presence Home Office 26 Manufacturing Locations 31 Warehouses, Sales Offices & R&D Facilities Countries of distribution Our > 24,000 Customers distribute our product through their own distribution channels 4
Slide 5: Products for Construction
Products for Construction 245 35 1,086 174 204 Engineers Engineering & Patents & Patents Code Reports Lab Technicians Trademarks Pending Wood Construction Products SAMPLE PRODUCT LINES: Truss plates, screw-delivery systems, holdowns, fasteners, joist hangers, wood & steel shearwalls, moment frames P
Slide 6: Products for Construction (continued)
Products for Construction (continued) Concrete Products SAMPLE PRODUCT LINES: Powder-actuated tools, mechanical anchors, adhesives, concrete repair systems, fiberglass jackets, carbon fiber Product Applications Bridges Concrete Piers Agricultural Silos DIY – Home Depot 6
Slide 7: Wood Construction — Product Spotlight: Truss Products and Software
Wood Construction — Product Spotlight Truss Products Truss Software • Truss plates are made from light-gauge • Our truss software supports our core wood product galvanized steel and are pressed into the lumber offering by providing a complete system to join wood members together, which create a • Ou
Slide 8: Wood Construction — Product Spotlight: Outdoor Accents Decorative Hardware
Wood Construction — Product Spotlight Outdoor Accents® Decorative Hardware • Outdoor Accents wood connectors and fasteners offer decorative appeal and structural strength to outdoor living areas such as pergolas, gazebos and patio covers • The hardware accommodates various lumber sizes, providing fl
Slide 9: Concrete Construction — Product Spotlight: Mechanical Anchors
Concrete Construction — Product Spotlight Mechanical Anchors • Our mechanical anchors are designed to install easily and securely into a variety of base materials — including concrete, brick and stone • For applications where there is a risk of concrete cracking, specific anchors have been designed
Slide 10: Addressable Market Opportunity
Addressable Market Opportunity(1) Addressable Market $1.3 B (9%) $5.8 B Addressable Market $730 M (13%) $15.0 B $1.5 B Addressable Market: $1.5 B (100%) Fasteners (Addressable) Concrete (Addressable) Wood Connectors & Truss (Addressable) (1) Note: Market sizes and market shares based on internal est
Slide 11: Simpson's Market Share
Simpson’s Market Share(1) SSD’s Share $165 M (13%) $730 M SSD’s Share $151 M (21%) $1.3 B $1.5 B SSD’s Share $763 M (51%) Fasteners (SSD Share) Concrete (SSD Share) Wood Connectors & Truss (SSD Share) (1) Note: Market sizes based on internal estimates using information as of December 31, 2018. Inclu
Slide 12: Net Sales Correlation to U.S. Housing Starts
Net Sales Correlation to U.S. Housing Starts Our investments in adjacent products and markets have helped mitigate our exposure to a cyclical U.S. housing market over time… $1,100 2.0 $1,000 1.8 $900 1.6 $800 1.4 Housing Starts (M) $700 1.2 $600 1.0 ($M) $500 0.8 $400 0.6 $300 $200 0.4 $100 0.2 $0 0
Slide 13: Strategic Growth Initiatives
Strategic Growth Initiatives Rationale …while also allowing us to provide a complete product solution to our customers and to improve sales and margins in our core wood connector business. EUROPE CONCRETE SOFTWARE • Attractive opportunity to • Sharpening focus on • Preserves market share of grow woo
Slide 14: Simpson Strong-Tie Technology Strategy
Simpson Strong-Tie Technology Strategy Technology strengthens our value proposition as the industry trusted partner in construction solutions and building software systems. Design Input Estimation Workflow Output Pipeline Bill of Back-Office Web 2D / 3D Material Systems Apps Takeoffs Simpson Hyphen
Slide 15: Operating Income Margin Outperformance
Operating Income Margin Outperformance Simpson Historical Operating Income Margin Versus Peer Average(1) 25.0% 19.9% 20.0% 16.4% 15.1% 14.1% 13.8% 14.1% 16.0% 15.0% 13.3% 13.2% 13.3% 12.3% 12.1% 11.6% 9.4% 9.5% 12.6% 10.7% 10.0% 7.8% 6.0% 6.1% 5.5% 5.0% 3.2% 3.2% 0.0% (0.4%) (5.0%) (6.2%) (10.0%) (8
Slide 16: Strong Business Drives Shareholder Value
Strong Business Drives Shareholder Value A Strong Unique Business Model… Enables Us to Deliver Value to Shareholders Simpson is seen as a thought leader in defining evolving The Board employs a balanced capital allocation strategy building codes in collaboration with customers and that utilizes free
Slide 17: Thoughtful Deployment of Capital
Thoughtful Deployment of Capital Based on shareholder feedback, the initial results of an extensive review of our capital allocation strategy and the high degree of confidence we have in our business, the Company has established a current target capital return to shareholders of a minimum of 50% of
Slide 18: 2020 Plan
2020 Plan KEY OBJECTIVES FY 2016A 2020 TARGETS FOCUS ON ORGANIC • $861 M Net Sales • ~8% Organic Net Sales CAGR(1) 1 GROWTH • ~26% - 27% Operating Expenses as a % of RATIONALIZE COST • 31.8% Operating Expenses as Net Sales STRUCTURE TO a % of Net Sales • ~21% - 22% Operating Income Margin(2) 2 INCRE
Slide 19: The SAP Project
The SAP Project SAP STRATEGY Why? Legacy platform no longer able to support growing and complex needs of the business Current focus on converting all North American locations before other foreign operations to create efficiencies No scope creep helps contain costs Limited customization helps
Slide 20: 3-Year Relative Price Performance
3-Year Relative Price Performance Recent stock price performance reflects clarity surrounding business strategy, growth prospects and operational efficiencies 140% 120% 100% 80% SSD: +74% 60% Proxy Peers: +71% 40% S&P 500: +41% 20% DJUSBM: +21% 0% -20% -40% Simpson Manufacturing Co., Inc. DJ US TM/B
Slide 21: Track Record of Shareholder Engagement and Responsiveness
Track Record of Shareholder Engagement and Responsiveness • Members of our management and Board engaged with stockholders, representing ~51% of our shares, regarding compensation and governance topics, which resulted in the following changes: Introduced long-term incentive award with three year re
Slide 22: Robust Sustainability Programs
Robust Sustainability Programs We believe in doing what’s right for our people, customers and community Environmental Efforts Social Programs Manufacturing Process Employee Involvement Our value engineering process optimizes design while Our employees dedicate hundreds of volunteer hours each maximi
Slide 23: Appendix
APPENDIX
Slide 24: 2020 Plan Improvements by Initiative
2020 Plan Improvements by Initiative In an effort to both reduce costs and drive profitability, we will be focused on operational improvements in our key focus areas. EUROPE CONCRETE SOFTWARE • Consolidated European • Ceased development of • Investing in software management team to one low-margin co
Slide 25: Software Critical to Preserve & Grow Core Business
Software Critical to Preserve & Grow Core Business Over 40% of our core wood connector business is tied to customers with software needs INVESTMENTS IN SOFTWARE Acquired CG Visions (January 2017) Proprietary Truss Software • Provides expertise and resources to offer • Ongoing development to support
Slide 26: Return on Invested Capital (ROIC) Definition
Return on Invested Capital (“ROIC”) Definition When referred to in this presentation, the Company’s return on invested capital (“ROIC”) for a fiscal year is calculated based on (i) the net income of that year as presented in the Company’s consolidated statements of operations prepared pursuant to ge
Slide 27: Simpson's People Make the Difference
SIMPSON’S PEOPLE MAKE THE DIFFERENCE simpsonmfg.com/financials 27
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