American Woodmark Corporation · NASDAQ:AMWD
American Woodmark — Investor Presentation (August 2024)
38 slides from American Woodmark's investor presentation, Aug 2, 2024
Slide 1: Investor Presentation Updated: July 2024
Exhibit 99.1 Investor Presentation Updated: July 2024
Slide 2: Legal Disclosure
Legal Disclosure Forward-Looking Statements This presentation contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements as to expected future financial and operating results. These forward-looking statements may be
Slide 3: Table of Contents
Table of Contents American Woodmark at a Glance 5 Long-Term Strategy 12 Competitive Advantages 22 Financial Overview 29 3
Slide 4: Key Messages: Why Invest With Us?
Key Messages: Why Invest With Us? Leveraging market leadership in resilient value segment 1 of the U.S. cabinet market to drive deeper channel penetration Superior service platform and turnkey builder channel solution is a key 2 competitive advantage ingrained in our growth strategy Our culture and
Slide 5: American Woodmark: At a Glance
American Woodmark: At a Glance Key Company Facts American Woodmark is a U.S. based pure-play cabinet manufacturer highly focused on the resilient value segment of the U.S. market Winchester, VA ~8,600 Headquarters Team Members From inspiration to design and installation, we strive for simplification
Slide 6: Our Purpose Driven Culture Sustains Our Competitive Advantage
Our Purpose Driven Culture Sustains Our Competitive Advantage Mission Vision Values Create value through people: Uncover and celebrate Our CITE principles: the unique potential in every • Provide kitchens and baths of • Customer Satisfaction individual: pride for the American family • Integrity • Co
Slide 7: Our Leadership Team
Our Leadership Team Strong leadership with decades of experience and industry expertise Scott Culbreth Paul Joachimczyk Rob Adams Kim Coldiron President & Chief Senior Vice President & Senior Vice President, Senior Vice President & Executive Officer Chief Financial Officer Manufacturing & Chief Huma
Slide 8: Steady Evolution Has Strengthened Our Scale And Market Position
Steady Evolution Has Strengthened Our Scale And Market Position Investment Raygold Industries Formation of relationships Acquisition of RSI in manufacturing grows sales with Home Depot and solidified position in capabilities in to $6M and is Lowe’s precedes the opening price Monterrey, Mexico acquir
Slide 9: Tailwinds From Demographic Shifts and Undersupplied Housing
Tailwinds From Demographic Shifts and Undersupplied Housing Support Higher Levels of Future Residential Investment U.S. Population Age 44-59 1 Demographics and past underinvestment, combined with ~65 million (Gen X) mobility and migration trends, provide strong multi-year • Move up buyers; drives in
Slide 10: Aging U.S. Housing Stock Is An Important Repair & Remodeling Leading Indicator
Aging U.S. Housing Stock Is An Important Repair & Remodeling Leading Indicator Increasing Age in Years of U.S. Historically Stable Growth in U.S. Repair 1 2,3 Housing Stock: 2012 vs 2022 & Remodel (R&R) Expenditures ($B) 600 28-year CAGR of ~5% 500 400 300 200 100 0 12 or less 13 to 22 23 to 32 33 t
Slide 11: Building On a Solid Foundation to Accelerate Adjusted EBITDA Growth
Building On a Solid Foundation to Accelerate Adjusted 1 EBITDA Growth Efficiently aligning our scaled platform with a favorable long-term growth outlook by providing quality solutions and executing our “GDP” strategy EBITDA Long Term Target 1,4 >$350M Growth Targeting above Where We Are market growt
Slide 12: Long-term Strategy: “GDP”
Long-term Strategy: “GDP” 12
Slide 13: “GDP”: Our Economic Engine To Drive Growth & Margin Expansion
“GDP”: Our Economic Engine To Drive Growth & Margin Expansion Our “GDP” Strategy is the lens we view long-term decision-making through, enabling growth and profitability through the cycle Growth Digital Transformation Platform Design Product Innovation One American Woodmark Customer Experience (CX)
Slide 14: Growth: Maximize Our Market Opportunity Through Key Growth Pillar Initiatives
Growth: Maximize Our Market Opportunity Through Key Growth Pillar Initiatives Highly Fragmented Key Growth Drivers Market Opportunity 1 Product Innovation and Kitchen & Bath Cabinet Industry Expand Channel Capacity Investments Opportunities Top 3 • Accelerating growth through product • Simple Trends
Slide 15: Case Study: Builder Turnkey Solution
Case Study: Builder Turnkey Solution Builder Channel Opportunity • Homebuilders have demanding servicing requirements to efficiently bring new homes to market Outcome • Cabinet installation occurs at the tail end of the home building process, requiring a high level of precision and • Largest share o
Slide 16: Case Study: Adapting Our Offerings To Add Value And Accelerate Growth
Case Study: Adapting Our Offerings To Add Value And Accelerate Growth Builder Channel Opportunity • Builders increasingly look to suppliers to find ways to improve new home affordability • Demographic shifts drive more first-time home buyers Outcome further accelerating the need for value-oriented o
Slide 17: Case Study: Adapting Our Brand Portfolio To Accelerate Growth
Case Study: Adapting Our Brand Portfolio To Accelerate Growth Distribution Channel Opportunity • New Construction business primarily served by Builder Direct channel Outcome • Grow Distribution market share by increasing TM penetration in Distributor channel by reducing conflict • Launched 1951 Cabi
Slide 18: Digital Transformation: Customer Experience and Drive Efficiencies
Digital Transformation: Customer Experience and Drive Efficiencies Strengthening Our Competitive Advantage and Profitability by Leveraging Digital Capabilities Unlock Efficiencies Through Increase Consumer Centric One American Woodmark Approach to Digital Marketing • Enterprise Resource Planning and
Slide 19: Digital Transformation Case Study: Digital Marketing Platform
Digital Transformation Case Study: Digital Marketing Platform Digital Lead Generation • Kitchen & Bath retailers in the dealer channel are key growth drivers with billions in cabinetry sales • Local retailers often rely on advertising methods with limited reach due to budget constraints American Woo
Slide 20: Platform Design: Leverage Complexity Reduction and Operational Excellence to Drive Margin Improvement
Platform Design: Leverage Complexity Reduction and Operational Excellence to Drive Margin Improvement Complexity Reduction and Operational Excellence and Significant Opportunity Customer Experience Systems Thinking For Margin Expansion • Localize capacity needs and position • Increase use of high-qu
Slide 21: Creating Manufacturing Centers of Excellence to Meet Growing Demand
Creating Manufacturing Centers of Excellence to Meet Growing Demand Greenfield Expansion of Monterrey, MX Hamlet, NC Facility Facility Completed in: Completed in: Q4 FY24 Q3 FY24 Highlights: Highlights: • Strategically located components capacity • Creates a new Bath Manufacturing Center of Excellen
Slide 22: Competitive Advantages
Competitive Advantages
Slide 23: How We Win: By Providing a Superior Customer Experience
How We Win: By Providing a Superior Customer Experience Across Our Targeted Product Offerings with a Focus on Value Market Product Channels & Customers Customer Experience Objective Be the preeminent kitchen and Innovation focus on a relevant, Win in the value segment by selling Create differentiate
Slide 24: U.S. Centric Revenue Profile with Significant Scale and Operational Capabilities
U.S. Centric Revenue Profile with Significant Scale and Operational Capabilities in Key Growth Regions Proximity to customers enhances our service capabilities and improves overall speed and customer experience Strategically located manufacturing facilities is a critical cost and logistics different
Slide 25: Positioned to Capture Outsized Growth Towards Affordable Offerings
Positioned to Capture Outsized Growth Towards Affordable Offerings 1 1 1 1 New Construction Home Center Dealer E-commerce Market Size $5.8 B Market Size $3.2 B Market Size $7.5 B Market Size ~$1.2 B 24% 15% 2% 9% 2 Approximate American Woodmark Market Share Cabinet Market Channel 1 Total Domestic Ma
Slide 26: Market Shifting to Value Offering Plays into Our Core Competency
Market Shifting to Value Offering Plays into Our Core Competency Custom Made-to-Stock • Provide less cyclical growth with affordable, high-quality products Semi-Custom Wide range of • Lean, on trend, and relevant offerings personalization options help drive operational excellence and supply chain op
Slide 27: Our Leading Brands Reinforce Long-Term Customer Relationships
Our Leading Brands Reinforce Long-Term Customer Relationships and Allow Us To Capitalize On Emerging Trends Builders Home Centers Dealer/Distributor Relationships with 40+ year ~1,800+ 1 19 of top 20 builders relationships customers 1 One of the top 20 builders is a modular home builder that does no
Slide 28: Commitment to Sustainability Supports Our People and Our Brand
Commitment to Sustainability Supports Our People and Our Brand Three Main Focus Areas Guide Our Path to Sustainability 2030 Our Team Members Carbon Footprint The Planet Leveraging Our Deploying Innovation to Reduce Reducing Waste and Assuring a Greatest Resource Emissions and Fuel Consumption Respon
Slide 29: Financial Overview
Financial Overview
Slide 30: Leveraging Our Strategy And Long-Term Housing Tailwinds To Drive Strong Adjusted EBITDA Growth
Leveraging Our Strategy And Long-Term Housing Tailwinds To Drive Strong Adjusted EBITDA Growth 8-9% 7-8% Maintaining Strong Free Cash Flow FY28E Four Year CAGR FY28E Four Year CAGR 5% Market Growth 2%-3% Share Growth 3 >$350 ~$2,500 >$150 $139 $1,848 $253 FY24 FY28E FY24 FY28E FY24 FY28E 1,2 1,2 1 N
Slide 31: Powerful Cash Engine Supports Our Capital Deployment Priorities
Powerful Cash Engine Supports Our Capital Deployment Priorities And Fuels Our Strategy 1 Free Cash Flow ($M) Capital Allocation Priorities Strong Balance Sheet 1 FY24 – FY28 Est. Capital Deployment >$1.0B Net Debt/Adj. EBITDA $520 $500 4.2x 3.5x Target leverage: 2.6x Growth Capex Significant 2.1x <1
Slide 32: Key Takeaways
Key Takeaways A compelling investment opportunity with a purpose driven culture and 1 clearly defined “GDP” strategy A track record of attractive growth with long-term industry tailwinds and 2 strong market position in our core value segment Investments in supply chain, production capabilities, and
Slide 33: Appendix
Appendix
Slide 34: Additional Disclosures
Additional Disclosures 1 The projections herein are based on a number of assumptions and estimates that are inherently subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control. See page 2 of this presentation for a discussion of the risks an
Slide 35: Appendix A: Adjusted EBITDA and Adjusted EBITDA margin Definition
Appendix A Adjusted EBITDA, and Adjusted EBITDA margin Definition We use EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin in evaluating the performance of our business, and we use each in the preparation of our annual operating budgets and as indicators of business performance and profitability.
Slide 36: Reconciliation of Adjusted Non-GAAP Financial Measures: Adjusted EBITDA
Reconciliation of Adjusted Non-GAAP Financial Measures to the GAAP Equivalents Adjusted EBITDA and Adjusted EBITDA Margin (in Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended thousands) April 30, 2013 April 30, 2018 April 30, 2019 April 30, 2020 April 30, 2021
Slide 37: Additional Definitions
Additional Definitions Free cash flow To better understand trends in our business, we believe that it is helpful to subtract amounts for capital expenditures consisting of cash payments for property, plant and equipment and cash payments for investments in displays from cash flows from continuing op
Slide 38: Reconciliation of Adjusted Non-GAAP Financial Measures: Free Cash Flow
Reconciliation of Adjusted Non-GAAP Financial Measures to the GAAP Equivalents Free Cash Flow (in thousands) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Cash provided by operating activities $ 58,737 $ 71,778 $ 77,080 $ 86,775 $ 190,845 $ 177,542 $ 151,763 $ 24,445 $ 198,837 $ 230,750 Less: Ca
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