Slide 1: Investor Presentation May 2024
CREATING BEAUTIFUL SPACES WHERE WE Investor LIVE, Presentation WORK, AND PLAY May 2024 TSX : ADEN Calgary Public Library: Ceilings, wall panels, and stairs by ADENTRA
Slide 2: Forward-Looking Statements
of the duties paid; the appeal process is typically a multi-year procedure, however, and described in our Annual Information Form, our Information Circular and in our MD&A. the actual timing and outcome of the appeal is not estimable at this time; to the extent we are unsuccessful in challenging the
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 3 of Arizona – Tucson, AZ; Lincolnshire House – Toronto,
Slide 4: Why Invest in ADENTRA
Why Invest in ADENTRA Well-Positioned to Track Record of Architectural Building Active Strategies to Industry Leader Capture Market Financial Product Focus Accelerate Growth Share Performance ✓ We maintain a ✓ Our specialty products are ✓ We hold a single-digit ✓ Clear strategy to capture ✓ Efficien
Slide 5: ADENTRA Snapshot (TSX: ADEN)
ADENTRA Snapshot (TSX: ADEN) $2.2 B $185 M $238 M C$921 M Sales Adj. EBITDA1 Operating Cash flows Market Cap2 65,000+ 2,700+ 175,000+ Customers Employees SKUs in portfolio 16% 40% Repair & Remodel Home Centers 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 Includes branded products, architectural Access to North American markets exclusive rights and Access to our extensive 175,000+ SKU building demonstrated buying power pro
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 4% 16% composites doors semi-exclu
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 Diversified Boards $3.6B 6% $5.5B Market 5% Share $2.2B 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 Aging U.S. Housing Stock & Annual Average Rate on 30-year Cumulative Underbuild1 Strong Home Equity Levels2 Fixed-Rate Mortgages1 (%) Units (millions) Average Age Home Equity Interest Rate (years) (US$Trillions) (%) 4,000
Slide 11: Our Growth Strategies
Our Growth Strategies Leveraging our platform in multiple areas… Vendor Sales and Global Sourcing Digital Engagement Acquisitions Management Marketing Expanding our product offerings Growing share with existing customers Capturing market share Executing on acquisitions …To create and sustain our com
Slide 12: Global Sourcing from over 30 Countries
Global Sourcing from over 30 Countries Global sourcing is a core competency and a sustainable advantage for ADENTRA • One-stop importer that creates value for vendors • We find global supply options that meet customers’ specific needs • We can create in-house brands for certain products • As a direc
Slide 13: Leading the Digital Customer Experience
Leading the Digital Customer Experience Historic Industry Model Future Business Model: Full Digital Engagement with Customers • The architectural building • Customers now expect E-commerce sites to • Comprehensive digital engagement and products industry has been slow conduct product research and pl
Slide 14: Demonstrated Growth Through Acquisition
Demonstrated Growth Through Acquisition Track Record – Sales Acquired (US$ millions) Significant market share available in a highly fragmented industry Clear investment criteria EAGLE PLY Architectural products in 670 adjacent/complimentary categories Primary focus on distribution, complemented by v
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 Financial KPIs Leverage3 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 Strengthening gross of achieving margin percentage multi-year growth Financial Performance 3. 4. Summary Strong and Efficient and predictable cash flow responsible generation underpins balance sheet our capital allocation Strong operational and financial execution creates l
Slide 18: As we have expanded our capabilities, we have strengthened our financial performance
Sales Growth Consistent Earnings Growth As we have 20% 10% expanded our Five-year Sales CAGR1 Five-year Earnings per Share CAGR1 capabilities, we have strengthened Strong Balance Sheet Dividend Growth our financial 2.8 12% performance. Net Debt to Adj. EBITDA after rents1.3 Five-year dividend CAGR1
Slide 19: Track record of growth and improving margins
Sales and Gross Margin US Millions $2,900 24% Sales Gross margin % 2023 Supported by our M&A average: 22% strategy and focus on $2,400 20.8% operational efficiency, we have achieved gross Track record $1,900 20% margin percentages exceeding of growth and 20% 18% $1,400 improving margins. 16% $900 14
Slide 20: Platform drives strong and growing cash flow
Adjusted EBITDA and Operating Cash Flow 1 before Changes in Working Capital US Millions 1 $300.0 Adj. EBITDA Operating Cash Flow before $250.0 Changes in Working Capital Conversion of Adjusted EBITDA1 into Operating Cash Flow before $200.0 Platform drives changes in working capital averages strong a
Slide 21: Responsible Leverage and Significant Liquidity
Responsible Leverage and Significant Liquidity Net Debt / Adjusted EBITDA after Rents1 Major Acquisitions 3.5 Major 3 Acquisition 2.8 +$445 M 2.5 Q1 2024 Unused borrowing capacity 2 Net Debt/Adjusted EBITDA & cash on hand after rents1,2 (March 31, 2024) 1.5 1 0.5 Responsibly managed balance sheet, w
Slide 22: Investor Relations
TSX Ticker Symbol ADEN Shares Outstanding1 22,436,010 Market Capitalization1 $921 million Available Liquidity2 +$445 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 s
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 Sales CAGR product 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