Slide 1: Investor Presentation Q2 2024
CREATING BEAUTIFUL SPACES WHERE WE LIVE, InvestorAND WORK, Presentation PLAY Q2 2024 TSX : ADEN Calgary Public Library: Ceilings, wall panels, and stairs by ADENTRA
Slide 2: Forward-Looking Statements
pricing inputs, and supply constraints; our business requires an ongoing investment in trade outcomes; we may not be able to sustain our level of sales or earnings margins; we working capital which we consider to be comprised of accounts receivable, inventory, and may be unable to grow our business
Slide 3: Creating beautiful spaces where we live, work, and play
Creating beautiful spaces where we live, work, and play From top left: Sacramento Airport - Sacramento, CA; Signal House – Newport Beach, CA; Microsoft Canada Excellence Centre – Vancouver, B.C.; Health Sciences Innovation Building, University of Arizona – 3 Tucson, AZ; Lincolnshire House – Toronto,
Slide 4: Why Invest in ADENTRA
Why Invest in ADENTRA Architectural Building Well-Positioned to Active Strategies to Track Record of Industry Leader Product Focus Capture Market Share Accelerate Growth Financial Performance ✓ We maintain a differentiated ✓ Our specialty products are ✓ We hold a single-digit market ✓ Clear strategy
Slide 5: ADENTRA Snapshot (TSX: ADEN)
ADENTRA Snapshot (TSX: ADEN) $2.2 B $185 M $238 M C$1.0 B Sales Adj. EBITDA1 Operating Cash flows Market Cap2 65,000+ 2,700+ 175,000+ Customers Employees SKUs in portfolio 16% 40% Home Centers Repair & Remodel 13% Essential End- Commercial Customer Market Channels Access 7% 85 90 / 10 800+ 57% 27% 4
Slide 6: A world-class platform of architectural building products
Our unique customer-centric A world-class 2,000 insights inform leading product 65,000+ solutions platform of SUPPLIERS CUSTOMERS Access to North Includes branded products, Access to our extensive architectural American markets exclusive rights and 175,000+ SKU product portfolio building demonstrate
Slide 7: Product Offerings
Product Offerings Broad product participation, emphasis on specialty materials 10% boards 17% 5% stair parts hardwood plywood ✓ Extensive 175,000+ SKU 8% product portfolio 15% diversified $2.2B 2023 Sales hardwood lumber ✓ 50% of products are branded, exclusive, or semi- 4% 16% composites doors excl
Slide 8: Opportunity to Capture New Market Share
Opportunity to Capture New Market Share 1 ADENTRA’s Share of Total Addressable Market Hardwood Plywood $2.2B 17% Market Share Doors $14.3B 2% Market Share Mouldings $6.9B 4% Market Share Deco Surfaces $6.5B 4% Market Share $2.2B Diversified $5.5B 5% Market Share Boards $3.6B 6% 2023 Sales with a Mar
Slide 9: Total Addressable Market - Customer Channel
Total Addressable Market - Customer Channel $43B1 Industrial • Segment includes OEM manufacturers, commercial Home Center millwork shops, specialty dealers/fabricators, and $10B lumber yards Pro Dealer $16B Pro Dealer • Segment includes one/two-step distributors and Industrial millwork wholesalers $
Slide 10: Long-Term End-Market Fundamentals Remain Positive
Long-Term End-Market Fundamentals Remain Positive New U.S. Housing Starts and Cumulative Aging U.S. Housing Stock & Annual Average Rate on 30-year Underbuild1 Strong Home Equity Levels2 Fixed-Rate Mortgages1 (%) Units (millions) Average Age Home Equity Interest Rate (years) (US$Trillions) (%) 4,000
Slide 11: Our Growth Strategies
Our Growth Strategies Leveraging our platform in multiple areas… Global Sourcing Vendor Management Digital Engagement Sales and Marketing Acquisitions Expanding our product offerings Growing share with existing customers Capturing market share Executing on acquisitions …To create and sustain our com
Slide 12: Global Sourcing from over 30 Countries
Global Sourcing from over 30 Countries Global sourcing is a core competency and a sustainable advantage for ADENTRA • One-stop importer that creates value for vendors • We find global supply options that meet customers’ specific needs • We can create in-house brands for certain products • As a direc
Slide 13: Leading the Digital Customer Experience
Leading the Digital Customer Experience Historic Industry Model Future Business Model: Full Digital Engagement with Customers • The architectural building products • Customers now expect E-commerce sites to • Comprehensive digital engagement and industry has been slow to adopt E- conduct product res
Slide 14: Demonstrated Growth Through Acquisition
Demonstrated Growth Through Acquisition Track Record – Sales Acquired (US$ millions) Significant market share available in a highly fragmented industry Clear investment criteria EAGLE PLY 670 Architectural products in adjacent/complimentary categories Primary focus on 282 270 distribution, complemen
Slide 15: Destination 2028 Sales Target
$800M $3.5B $500M $2.2B1 “Destination 2028” Sales Target 2023 Sales Organic Growth Acquisitions e2028 Run Rate Sales • Market growth and strategic initiatives driving mid-single-digit “Organic Growth” Key • “Acquisitions” supported by our expected cash flows and balance sheet capacity assumptions in
Slide 16: Our Target Financial KPIs
Sales CAGR1 Gross Margin2 EBITDA Margin2,5 +9% +20% +10% Our Target Leverage3 Financial KPIs Range Operating Cash flow before changes in working capital Average ROIC4,5 2-3X +$1B +12% Focused on delivering profitable growth and creating shareholder value 1. Sales CAGR is calculated on sales growth o
Slide 17: Financial Performance Summary
1. 2. Proven track record of Strengthening gross achieving margin percentage multi-year growth Financial Performance 3. 4. Summary Strong and predictable Efficient and cash flow generation responsible underpins our capital balance sheet allocation Strong operational and financial execution creates l
Slide 18: Five-year sales, earnings, balance sheet and dividend growth
Sales Growth Consistent Earnings Growth As we have 14.6% 8.7% expanded our Five-year Sales CAGR1 Five-year Earnings per Share CAGR1 capabilities, we have strengthened Strong Balance Sheet Dividend Growth our financial 2.2x 11.7% performance. Net Debt to Adj. EBITDA after rents1.3 Five-year dividend
Slide 19: Track record of growth and improving margins
Sales and Gross Margin US Millions $2,900 24% Supported by our M&A Sales strategy and focus on 22% operational efficiency, we $2,400 Gross margin % have achieved gross Track record $1,900 20% margin percentages exceeding of growth and 20% 18% improving margins. $1,400 16% $900 for the past 13 consec
Slide 20: Platform drives strong and growing cash flow
1 Adjusted EBITDA and Operating Cash Flow before Changes in Working Capital US Millions $300.0 1 EBITDA $250.0 Conversion of Adjusted Operating Cash Flow before Changes in Working Capital EBITDA1into Operating Cash Flow before changes $200.0 Platform drives in working capital averages strong and gro
Slide 21: Responsible Leverage and Significant Liquidity
Responsible Leverage and Significant Liquidity Net Debt / Adjusted EBITDA after Rents1 Major 4 Acquisitions 2.2x +$485 M 3.5 Major Acquisition 3 2.5 Q2 2024 Unused borrowing capacity Net Debt/Adjusted EBITDA after & cash on hand 2 rents1,2 (June 30, 2024) 1.5 1 Responsibly managed balance sheet, 0.5
Slide 22: Investor Relations
TSX Ticker Symbol ADEN Shares Outstanding1 25,018,910 Market Capitalization1 C$1.0 billion Available Liquidity2 +$485 million Investor Relations Website www.ADENTRAgroup.com investors@ADENTRAgroup.com Calgary Public Library: 1. Calculated using share count and closing price for the Company’s common
Slide 23: Appendix
APPENDIX Decorative surfaces by ADENTRA 23
Slide 24: Destination 2028 Capital Allocation
$1 billion in Operating Cash Flow before changes in Working Capital Investments in the Business $ 200 • Maintenance capex & working capital Rent payments $ 300 • Includes leased facilities “Destination 2028” Capital Allocation Acquisitions • Financed from cash flows and strength of balance sheet • E
Slide 25: Proven Approach to Building Value through M&A
Proven Approach to Building Value through M&A EXAMPLE TRANSACTION RESULTS 16% $82 ✓ Leveraged purchasing power to increase product Sales CAGR access and secure favorable pricing $53 ✓ Growth in key product categories ✓ Consolidation of insurance, benefits, accounting, tax planning ✓ Adj. EBITDA1 mar
Slide 26: Total Addressable Market – Regional
Total Addressable Market – Regional CANADA $43B1 ~$5.2B Total Addressable Market ‘17-’27 CAGR: 1.6% ADENTRA Sales: $262M • ADENTRA has multiple brands and Locations: 8 business locations in each key region MIDWEST N. EAST • Strong market presence, position and ~$7.4B ~$5.5B share in Canada ‘17-’27 C
Slide 27: Market Potential for our Transformed Business
Market Potential for our Transformed Business1 Future Addressable Market Value Future Addressable Market (more products, more value chain exposure, regional expansion) • All building material product categories across all channels and North American regions at the manufacturer level $43B Total Addre