Slide 1: Builders FirstSource 2021 Investor Day
Builders FirstSource 2021 Investor Day DECEMBER 7 • DALLAS, TEXAS
Slide 2: Welcome & Opening Remarks
Welcome & Opening Remarks MIKE NEESE • SVP, Investor Relations 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 2
Slide 3: Safe Harbor & Non-GAAP Financial Measures
Safe Harbor & Non-GAAP Financial Measures Cautionary Notice Statements in this presentation and the schedules hereto that are not purely historical facts or that necessarily depend upon future events, including statements about expected market share gains, forecasted financial performance or other s
Slide 4: Today's Agenda
Today’s Agenda 9:00 am Welcome & Opening Remarks 10:30 am Winning Together as 1 MIKE NEESE DAVE RUSH SVP, Investor Relations EVP, Integration Management Office (IMO) Leader Transforming the Homebuilding Industry Accelerating Digital Adoption & Scaling with Paradigm DAVE FLITMAN TIM PAGE President &
Slide 5: Transforming the Homebuilding Industry
Transfor ming the Homebuilding Industr y DAVE FLITMAN • President & CEO 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 5
Slide 6: Today's Key Messages
Today’s Key Messages 1 2 3 4 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 6
Slide 7: The Transformation of Homebuilding
The Transfor mation of Homebuilding 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 7
Slide 8: Unique Market Position and Our Sustainable Competitive Advantages
Unique Market Position and Our Sustainable Competitive Advantages National leader and consolidator in a highly Exceptional geographic footprint with fragmented industry with strong balance sheet customer and end market diversity A leading one-stop shop with innovative Strategically investing in valu
Slide 9: Builders FirstSource Snapshot (NYSE: BLDR)
Builders FirstSource Snapshot ( N Y S E : B L D R ) Largest U.S. Supplier of Building Products, Prefabricated Components, and Value-added Services to the Professional Builder KEY STATISTICS NATIONAL REACH. LOCAL EXPERTISE. (2021E) Dallas, TX ~$13.6B ~$19.5B ~$2.9B ~$1.9B Headquarters Market Cap1 Net
Slide 10: Benefiting from Favorable Industry Trends
Benefiting from Favorable Industr y Trends Annual Average Rate on 30-year Fixed-Rate Mortgages (%) YoY Change in Households (000s) 10.0 2,500 9.0 8.0 2,000 7.0 1,500 6.0 1,000 5.0 4.0 500 3.0 0 2.0 1.0 -500 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 201
Slide 11: Poised to Capture Significant Market Opportunity
Poised to Capture Significant Market Oppor tunity TODAY’S TOTAL ADDRESSABLE MARKET ~$19.5B BLDR 2021E Revenue 1 ~$150B Our Additional Market Share U.S. New Construction Building Materials – Multi-Family2 Pro R&R3 +100 to 300 bps Single-Family Homes Annual Above Market Growth (2022E to 2025E) ~$111B
Slide 12: Our Mission, Vision and Values
Our Mission, Vision and Values MISSION VISION VALUES To be the best supplier of building materials To make the dream of home At the center of everything we do – and services by having a people-first ownership more achievable for from the boardroom to the jobsite, they culture, exceptional customer s
Slide 13: Our Strategic Priorities Fueling Long-term Profitable Growth
Our Strategic Priorities Fueling Long-ter m Profitable Growth Organic Growth Drive Continue to Build Pursue of Value-added Operational Our High- Strategic Products and Excellence Performing Tuck-in Services Culture Acquisitions 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E
Slide 14: Organic Growth of Value-added Solutions
Organic Growth of Value-added Solutions ▪ Accelerate market penetration – Capture single-family potential – Grow multi-family and pro-remodeling segments in targeted markets ▪ Provide offsite assembly and other innovative solutions – Continue to address customer labor challenges and jobsite producti
Slide 15: Drive Operational Excellence: Introducing the 1-TEAM Operating System
Drive Operational Excellence: Introducing the 1-TEAM Operating System BUILDING PEOPLE Increase team member engagement and development BUILDING EXCELLENCE Drive 3% to 5% annual efficiencies through continuous improvement and excellence in everything we do BUILDING GROWTH Support solutions innovation
Slide 16: Early Innings in Our ESG Journey
Early Innings in Our ESG Jour ney ▪ Green building is a priority; team is ▪ Product Spotlight2 — READY-FRAME®: well trained and knowledgeable framing system utilizing BIM software to Focus on Green, calculate project-specific lumber needs ▪ Green products: trusses, wall Environmental Sustainable Bui
Slide 17: S O U R C E
2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 17
Slide 18: Continue to Build Our High-performing Culture
Continue to Build Our High-perfor ming Culture KEY FOCUS AREAS ▪ Drive world-class safety results through our “Drive to Zero” program ▪ Commitment to environmental and social responsibility; delivering sustainable solutions ▪ Enhance talent acquisition, employee development and retention – Military,
Slide 19: Pursue Accretive Tuck-in M&A
Pursue Accretive Tuck-in M&A ▪ Increased coverage in # BUILDING PRODUCTS SALES ($B) OF BUILDING desirable markets BUSINESSES SEGMENTED PRODUCTS BUSINESSES Geographic BY ANNUAL SALES SEGMENTED BY ANNUAL SALES Scale ▪ Leading positions in new markets >$1B 13 >$1B $46B $500M - $1B 5 $500M - $1B $3B Val
Slide 20: Latest Tuck-in M&A: Truss Technologies Strengthens Value-Added Offering in Michigan
Latest Tuck-in M&A: Truss Technologies Strengthens Value-Added Offering in Michigan Truss Technologies Acquisition Overview Footprint ▪ Purchase Price: ~$30M | TTM 2021 Sales: ~$30M Additional Value-added ▪ Highly profitable manufacturer of roof and floor trusses Component Capacity ▪ 3 plants in wes
Slide 21: Our Digital Platform to Fuel Long-term Growth
Our Digital Platfor m to Fuel Long-ter m Growth Homebuilding and Bolstered Our Digital Capabilities and Materials Sourcing is Entered the Digital Space through Going Digital Two Strategic Acquisitions Benefits Becoming the Center 1 ~$150B Provides the technologies and a platform for us to August 202
Slide 22: Strong Execution Generating Base Business Financial Strength
Strong Execution Generating Base Business Financial Strength 1 Sales ($B) Adj. EBITDA ($B) Adj. EBITDA Margin on Base Business 11.2% $19.5 $2.9 8.7% $3.8 $12.8 7.7% $0.3 $1.1 $10.9 16.4% $1.1 $15.7 40.4% Base $0.0 $11.5 $12.5 Business $0.8 CAGR $1.8 Base $0.9 $1.1 Business CAGR $(0.6) 2019 2020 2021
Slide 23: Introducing 2021E to 2025E Base Business Targets
Introducing 2021E to 2025E Base Business Targets 1 ~10% ~15% ~30% ~50bps Net Sales Adj. EBITDA EPS Adj. EBITDA Margin CAGR CAGR CAGR Expansion Annually Deployable Capital of $7B to $10B from 2022E to 2025E 1 Key assumptions: Single-family housing starts growth of LSD to MSD through 2025; base busine
Slide 24: 2021E to 2025E Base Business Targets
2021E to 2025E Base Business Targets 1 Revenue ($B) Adj. EBITDA ($B) EPS Adj. EBITDA Margin ~10% ~15% ~30% ~50bps CAGR CAGR CAGR Expansion Annually $23.1 13.2% $12.40 $3.0 11.2% $15.7 $12.5 $1.8 8.7% $1.1 $4.10 $2.70 2020 2021E 2025E 2020 2021E 2025E 2020 2021E 2025E 2020 2021E 2025E Deployable Capi
Slide 25: Deep and Experienced Leadership Team Driving Positive Momentum
Deep and Experienced Leadership Team Driving Positive Momentum TODAY’S PRESENTERS Dave Flitman Mike Farmer Lea Allah Dave Rush Tim Page Nate Herbst Peter Jackson President & CEO President, Commercial D&I Leader and EVP, Integration Mgmt. EVP, Digital Solutions SVP of Product CFO Joined: 2018 Operati
Slide 26: Accelerating Growth & Productivity through Operational Excellence while Embracing D&I
Accelerating Growth & Productivity through Operational Excellence while Embracing D&I MIKE FARMER • LEA ALLAH • President, Commercial D&I Leader and Operations HR Director 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 26
Slide 27: Accelerating Growth & Productivity through Operational Excellence while Embracing D&I
Accelerating Growth & Productivity through Operational Excellence while Embracing D&I Key Messages 1 2 3 4 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 27
Slide 28: Focused Efforts around Our 1-TEAM Operating System
Focused Effor ts around Our -TEAM Operating System Building Leading Growth Innovation ESG Operational Excellence 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 28
Slide 29: Early Stages of Capturing Merger-related Growth Opportunities
Early Stages of Capturing Merger - related Growth Oppor tunities 1 2 3 $200M to $250M $1.3B to $1.4B $700M to $800M Capture growth synergies Gain more from Invest in growth through cross-selling existing assets through CAPEX and and price harmonization ▪ Commercial excellence new competencies ▪ Stra
Slide 30: Commercial Excellence is Core to Long-term Growth
Commercial Excellence is Core to Long-ter m Growth ▪ Analytics on customer profitability Sales Analytics ▪ Margin transparency and pricing support ▪ Focus on customer value ▪ Supplier partnership and negotiating Category Mgmt. ▪ Assortment strategies ▪ Cost transparency and timely pass through Comme
Slide 31: Innovation is a Key Differentiator, Creating Customer Value and Driving Retention
Innovation is a Key Differentiator, Creating Customer Value and Driving Retention ▪ Leader in offsite manufacturing – Addresses real customer need: labor shortage and speed to build – Independent study (NAHB) confirms the value creation of components vs. traditional stick frame • 223 hours of labor
Slide 32: ESG Case Study Creates Sustainable Solutions
ESG Case Study Creates Sustainable Solutions BACKGROUND READY-FRAME® ADVANTAGES2 ▪ 3rd party independent study completed in 2019 proved significant benefits of READY-FRAME® BETTER Greater Accuracy to Cut to 1/16” ▪ Utilizes building information modeling to calculate framing needs for a project and p
Slide 33: Building a High-Performance Culture through D&I
Building a High-Perfor mance Culture through D&I 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 33
Slide 34: High-Performance Culture Driving Success
High-Perfor mance Culture Driving Success Key Talent Highlights ▪ Conducted organizational health index (OHI) survey in October 2020 to Total Team Members ~ 28k gain insight into cultural norms and business practices – 9,000+ workforce participation Ethnic Diversity 52% ▪ High overlap in top desired
Slide 35: Focusing on Diversity & Inclusion
Focusing on Diversity & Inclusion D&I Survey Four Key Priorities Identified through Survey September 2021 Each Includes Goals, Action Steps and a Measurement of Success / Progress Majority of Team Members Feel: Enhance Increase Diversity Improve & Enhance Increase Inclusion ▪ Welcome, safe and inclu
Slide 36: Continue to Strive for More – Improving Employee Experience
Continue to Strive for More – Improving Employee Experience Leverage feedback and data from annual engagement surveys – launching to all team members in 2022 ▪ Serves as a baseline ▪ Key focus areas: engagement, communication, retention and turnover ▪ Align with Net Promoter Scores (NPS) D&I initiat
Slide 37: Building Excellence through Our 1-TEAM Operating System
Building Excellence through Our -TEAM Operating System ▪ 20% of team members are LEAN certified and increasing ▪ 10% increase in LEAN training events in 2021 ▪ Increase manufacturing automation with robotics ▪ Continuous improvement culture targeting 3% to 5% annual productivity ▪ 15% improvement in
Slide 38: Delivering Productivity through Targeted Initiatives
Delivering Productivity through Targeted Initiatives WHAT WE HAVE ACHIEVED YTD ▪ Truss – improved board foot per hour 20% and increased capacity 13% ▪ Millwork – improved doors per hour 6% and increased capacity 16% EXAMPLE NEAR-TERM EFFICIENCY TARGETS ▪ Improve fleet utilization with ~50% improveme
Slide 39: Building People through Our 1-TEAM Operating System
Building People through Our -TEAM Operating System ▪ Annual tracking of team member engagement and focused on 10% improvement ▪ Quarterly town halls and regular communication to ensure alignment ▪ Consistent onboarding and new team member training ▪ Leadership development and sales training ▪ 10% an
Slide 40: Key Takeaways
Key Takeaways Significant productivity and commercial growth 1 Cultural Alignment with opportunities in value added products post-merger with $2B+ of incremental sales through 2025 Clear Annual Targets Long runway ahead with value pricing and 2 digital initiatives to leverage our position and Produc
Slide 41: Q&A Session
Q&A Session Above Presenters 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 41
Slide 42: Break
Break ~15 Minutes 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 42
Slide 43: Winning Together as 1: Integration Success
Winning Together as 1: Integration Success DAVE RUSH • EVP, IMO LEADER 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 43
Slide 44: Winning Together as 1: Integration Success
Winning Together as 1: Integration Success DAVE RUSH • EVP, IMO LEADER 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 44
Slide 45: Winning Together as 1: Key Messages
Winning Together as 1 Key Messages Created the nation’s premier supplier of building materials and 1 services through successful integration of high-performing cultures 2 Overdelivered on commitments and maximizing cost synergies Further building a platform for growth with financial strength 3 for i
Slide 46: Continuing to Build Our High-performing Culture
Continuing to Build Our High-perfor ming Culture Strong Cultural Alignment Direct Leadership Team Identified in Initial Employee Reporting to CEO Engagement Survey ▪ Legacy BFS: 6 ▪ Shared 13 of 15 top values with ▪ Legacy BMC: 4 strong emphasis on safety, customers and teamwork Blended Field Leader
Slide 47: Key Achievements Since Close
Key Achievements Since Close ✓ Successful Day 1 Plan built around an organization structure that truly represented the best of each, has representation of both companies and capacity for growth ▪ Leadership changes finalized and announced prior to Day 1 and turnover remains low ▪ Quick alignment in
Slide 48: Synergy Target One Year Ahead of Schedule – Capturing Further Upside
Synergy Target One Year Ahead of Schedule – Capturing Fur ther Upside MAJOR MILESTONES ESTIMATED RUN-RATE COST SAVINGS OF $160M $160M Focus on Cost Synergies Prior: $130M to $150M Other ✓ Tracking run-rate savings of $140M for FY21 – 12 months Footprint Consolidation ahead of schedule $140M Benefits
Slide 49: A Winning Combination for All Stakeholders
A Winning Combination for All Stakeholders – Unique Oppor tunity Drives Substantial Value Complementary Resources Industry leader footprint in top to accelerate with scaled platform innovation to improve for value-added MSAs with operational excellence solutions: millwork, enhanced ability to and so
Slide 50: Highly Compelling Value Proposition – Significant Positive Achievements
Highly Compelling Value Proposition – Significant Positive Achievements WHAT WE SET OUT TO DO HOW WE ARE TRACKING1 ▪ Become the premier supplier of building materials and services ✓ $15.7B base business vs. $12.8B pro forma ▪ Protect the base in overlap markets ✓ 24% core organic growth ▪ Create sub
Slide 51: Key Takeaways
Key Takeaways Created the nation’s premier supplier of building 1 materials and services through successful integration of high-performing cultures Overdelivered on commitments and maximizing 2 cost synergies 3 Further building a platform for growth with financial strength for innovation and an esta
Slide 52: Accelerating Digital Adoption – Scaling & Growing with Paradigm
Accelerating Digital Adoption – Scaling & Growing with Paradigm TIM PAGE • NATE HERBST • EVP, Digital Solutions SVP of Product Development, Paradigm (A Founder of Paradigm) 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 52
Slide 53: Accelerating Digital Adoption
Accelerating Digital Adoption Key Messages 1 Uniquely positioned to be the driver of digital transformation 2 Our goal is to be at the center of the homebuilding ecosystem Well-positioned for significant growth with $1B of additional 3 revenue within five years 2 0 2 1 I N V E S T O R D A Y – © B U
Slide 54: Construction is Among Least Digitized Sectors without a Clear Digital-transformation Leader
Construction is Among Least Digitized Sectors without a Clear Digital-transfor mation Leader Industry Digitization Index ASSETS USAGE LABOR Overall Digital Digital Business Market Digital Spending Digital Digitization Sector Digitization1 Spending Asset Stock Transactions Interactions Processes Maki
Slide 55: Why BFS is Uniquely Positioned to Deliver Digital Transformation
Why BFS is Uniquely Positioned to Deliver Digital Transfor mation Scale and market 5k+ sales team with Well-positioned Technical knowledge Unmatched Aspiration for digital position to reach direct and trusted early in value chain spanning the distribution platform transformation with a fragmented ho
Slide 56: Creating an End-to-End Platform to Tackle Customer Pain Points
Creating an End-to-End Platfor m to Tackle Customer Pain Points END-TO-END DIGITAL PLATFORM Structural Take-off Homebuyer Land Lot Architect Job Site Home and System and Selections Development Selection Design Management Lifecycle Engineering Estimate and Signoff ▪ Acquisition of Paradigm provides a
Slide 57: Acquiring Paradigm and Apollo Software Assets Accelerated Our Digital Initiative
Acquiring Paradigm and Apollo Software Assets Accelerated Our Digital Initiative ACQUISITION BENEFITS Becoming the Center of the Ecosystem ▪ Technologies to simplify configuring, quoting, and ▪ Provides design collaboration manufacturing building products and workflow, construction, budgeting and sc
Slide 58: Scaling with Paradigm
Scaling with Paradigm 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 58
Slide 59: Scaling with Paradigm
Scaling with Paradigm Key Messages Continuing to deepen builder relationships with access to 1 home construction projects Recent combination enables greater investment, scale, and 2 growth – revolutionizing the digitization of the homebuilding market with innovative solutions Strategic alignment in
Slide 60: Paradigm Snapshot
Paradigm Snapshot Key Stats Software Mix A Growing Platform – Revenue ($M) Founded 1999 ~$45 Users 70,000+ Omni Customer Retention 90% Nexus Estimate $23 Window Market Penetration 60% to 70% Omni Builder Door Market Penetration 50% Vendo 2018 2021E Paradigm is a Platform with a Strong History of Gro
Slide 61: Our Sustainable Competitive Advantages – A Differentiated Platform for Future Growth
Our Sustainable Competitive Advantages – A Differentiated Platfor m for Future Growth Technology Culture Ability to Attract the Right Talent Continuously innovating with new product rollouts Our unique culture makes this possible Proven Track Record of Building Deep Industry Expertise Enterprise and
Slide 62: Paradigm Omni – Window and Door Configuration and Quoting Software
Paradigm Omni – Window and Door Configuration and Quoting Software Platform Features ▪ Paradigm-managed services ▪ Best-in-class configurator ▪ Centralized product data for powering configuration ▪ APIs for managing data and integrating with customer systems ▪ Multi-lingual technology ▪ Integration
Slide 63: Our Unique, Digitized Estimating Service
Our Unique, Digitized Estimating Ser vice Open Architecture Estimating Service ▪ Reduces time and lowers cost to quote, improves accuracy, and allows for more products to be sold ▪ Innovative time-saving software examines blueprints and generates an itemized material list ▪ Increases customer satisf
Slide 64: Builder Omni: Leverage Estimating and Configuration to Supercharge Whole Home Design
Builder Omni: Leverage Estimating and Configuration to Supercharge Whole Home Design Building Key Software Capabilities ▪ Virtual design improves lead generation, accelerates sales cycle, enhances design process, and creates a more engaging homebuilding experience ▪ Interactive, photo-realistic tech
Slide 65: BFS + Paradigm = A Powerful Combination
BFS + Paradigm = A Powerful Combination ▪ Access to BFS resources – Customers and customer plans – Supplier relationships to drive marketplace – Financial resources required to scale ▪ Paradigm has experience going into different markets and scaling ▪ Estimate and Builder Omni are critical entry poi
Slide 66: The Future of Digitalizing Whole Home Design
The Future of Digitalizing Whole Home Design 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 66
Slide 67: Accelerating Digitalization of the Industry to Become the Center of Homebuilding Ecosystem
Accelerating Digitalization of the Industr y to Become the Center of Homebuilding Ecosystem Single Family Housing Starts by Size of Builder Share of Starts Total Builder2 BFS Addressable3 Total Material4 Top 5 Production Builders 5 $9B $28B 18% (>10k Homes/Year)1 Regional Builders 26% 195 $11B $38B
Slide 68: Delivering the Whole House Take-off
Delivering the Whole House Take -off Roofing Skylights Insulation Soffit/Fascia Gutters Furnishings Roof Truss Siding/Ext Trim Int Trim/Molding Closets Lighting Int Doors Drywall Core BFS Products Paint/Stain Window Treatments Fireplace House Wrap Framing Lumber Railings Hardware Within Paradigm Est
Slide 69: Creating a Homebuilding Marketplace
Creating a Homebuilding Marketplace Home Lifecycle Management Homebuyer Experience ▪ Closing task list ▪ Lead generation ▪ Warranty management Start ▪ Find a community, home style, floorplan, and builder ▪ Post-purchase projects and long-term remodel options ▪ Consistent experience throughout proces
Slide 70: Our Approach to Digital Creates Value for Homebuyers, Homebuilders and Supply Partners
Our Approach to Digital Creates Value for Homebuyers, Homebuilders and Supply Par tners Integrated Homebuyer Homebuilder Supply Partners Improved homebuying experience, with Competitive advantage in the selling A new, lower cost channel for bringing ability to visualize design ideas process with 3D
Slide 71: Homebuilder Adoption Drives Monetization
Homebuilder Adoption Drives Monetization How We Will Create Shareholder Value ▪ Provide faster quotes to customers, increasing win rate ▪ Increase wallet share with existing customer, including +$1B Net New Revenue penetration of value-added products and services within 5 Years ▪ Ability to win new
Slide 72: Key Takeaways
Key Takeaways Uniquely positioned to be the driver of 1 digital transformation Continuing to deepen builder relationships with access to home construction projects Our goal is to be at the center of the 2 homebuilding ecosystem Revolutionizing the digitization of the homebuilding market with innovat
Slide 73: Compounding Shareholder Value
Compounding Shareholder Value PETER JACKSON • CFO 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 73
Slide 74: Compounding Shareholder Value: Key Messages
Compounding Shareholder Value Key Messages Strengthened the core business with a durable platform for 1 profitable growth and margin expansion Strong, flexible balance sheet and robust cash flow generation 2 support growth investments 3 Clear capital allocation priorities Sustain and grow our double
Slide 75: Strong Business to Deliver 10%+ Adj. EBITDA Margin on 2021E Base Business
Strong Business to Deliver 10%+ Adj. EBITDA Margin on 2021E Base Business 1 60%+ of Our Base Business1 is Non-Commodity… … the Majority of Our EBITDA Growth is Driven by Value-added Products, Sustainable Operations Improvement and M&A Synergies Sales ($B) Adj. EBITDA ($B) Adj. EBITDA 26% Margin on B
Slide 76: Strong Balance Sheet and Liquidity Provide Financial Flexibility
Strong Balance Sheet and Liquidity Provide Financial Flexibility Capital Summary & Financial Highlights ($M) Pro Forma Net Leverage1 Improvement 4.2x September 30, 2021 3.1x 2.5x Cash & Cash Equivalents $225 1.3x ~1.2x Debt $2,453 2017 2018 2019 2020 YTD 2021 2 Shareholder’s Equity $5,523 Weighted A
Slide 77: Clear Capital Allocation Priorities
Clear Capital Allocation Priorities Share Growth FUTURE PRIORITIES Repurchases Growth ▪ Pursue margin accretive deals with strategic, tuck-in M&A 35% ▪ Drive productivity and growth with growth investments ~$2.2B Strategic, Tuck-in M&A CapEx Growth Share Repurchases CAPITAL DEPLOYED Share Repurchase
Slide 78: Disciplined and Strategic Approach to Tuck-in M&A
Disciplined and Strategic Approach to Tuck-in M&A STRATEGIC FILTERS FINANCIAL CRITERIA Geographic Value-added Technological Scale Products Advancement IRR > Cost of Capital ▪ Increase higher ▪ Increased coverage ▪ Provide innovative margin value-added in desirable solutions to build more products mi
Slide 79: Strong Track Record of M&A in 2021
Strong Track Record of M&A in 2021 2021 Acquisition Date May July August September September December 2021E Annual Sales ~$49M ~$330M ~$45M ~$143M N/A ~$30M Strategic Filters Geographic Scale ✓ ✓ ✓ ✓ Value-add Products ✓ ✓ ✓ ✓ ✓ Technological Advancements ✓ ✓ Financial Criteria IRR > Cost of Capital
Slide 80: Base Business Net Sales Bridge ($B)
Base Business Net Sales Bridge ( $ B ) 1 $2.8 to $3.0 $22.8 to $23.4 $1.8 to $2.0 $2.5 to $2.7 $15.7 2 ~10% Net Sales Growth CAGR on Modest Market Assumptions 1 Estimate assumes $400/mbf lumber & sheet good pricing. 2 Includes digital, value-added products and R&R. 2 0 2 1 I N V E S T O R D A Y – ©
Slide 81: Base Business EPS Bridge
Base Business EPS Bridge 1 Opportunity Driven $3.05 to $3.15 $12.05 to $12.40 $1.10 to $1.15 $0.55 to $0.60 $1.00 to $1.05 $2.25 to $2.35 $4.10 2 ~30% EPS CAGR from 2021E through 2025E 1 Estimate assumes $400/mbf lumber & sheet good pricing. 2 Assumes $5B cumulative share buyback over four years; 1.
Slide 82: Robust FCF Generation
Robust FCF Generation Base Business FCF ($B) $1.9 $1.7 ~$3B $1.5 $1.3 $1.3 $7B to $10B Deployable Capital from 2022E to 2025E ~$6B $0.6 ~$1B PF 2020 2021E 2022E 2023E 2024E 2025E FCF Generation 100% FCF Net Income Conversion Target EBITDA Growth (Increase of 1.0x Leverage) 2.0x Leverage 2 0 2 1 I N
Slide 83: 2021E to 2025E Base Business Targets
2021E to 2025E Base Business Targets 1 Revenue ($B) Adj. EBITDA ($B) EPS Adj. EBITDA Margin ~10% ~15% ~30% ~50bps CAGR CAGR CAGR Expansion Annually ▪ Continued tuck-in M&A ▪ Favorable value-added ▪ Continued tuck-in M&A of ~$2B ▪ Increased value-added product mix product mix ▪ Low to mid single digi
Slide 84: Strong Fundamentals Above Peers
Strong Fundamentals Above Peers Sales CAGR Adj. EBITDA CAGR Adj. EBITDA Margin Expansion Adj. EBITDA Margin 2022 EV / EBITDA vs. Peers4 (2015 to LTM 3Q21) (2015 to LTM 3Q21) (2015 to LTM 3Q21) (LTM 3Q21) 16.8x 50% +570bps 10.9x 35% 390bps 25% 7.7x 20% 13% 11% 11% 6% 4% -130bps BLDR Building BLDR Bui
Slide 85: Key Takeaways
Key Takeaways Strengthened the core business with a durable 1 platform for profitable growth and margin expansion Strong, flexible balance sheet and robust cash 2 flow generation support growth investments Clear capital allocation priorities 3 Sustain and grow our double-digit Base Business 4 Adj. E
Slide 86: Closing – Invest with Us
Closing – Invest with Us DAVE FLITMAN • President & CEO 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 86
Slide 87: Invest with Us
Invest with Us 1 2 3 4 2021E to 2025E Base Business Targets1 ~10% ~15% ~30% ~50bps Adj. EBITDA Margin Net Sales CAGR Adj. EBITDA CAGR EPS Growth Expansion Annually Deployable Capital of $7B to $10B from 2022E to 2025E 1 Key assumptions: Single-family housing starts growth of LSD to MSD through 2025,
Slide 88: Q&A Session
Q&A Session All Presenters 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 88
Slide 89: Appendix
Appendix 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 89
Slide 90: Base Business Sales and Adj. EBITDA Projection by Commodity Price
Base Business Sales and Adj. EBITDA 1 Projection by Commodity Price Illustrative FY 2021E Assumptions ▪ Provided a grid with various commodity cost assumptions and the corresponding profits if you assume static commodity prices. Shorter Sales ($B) Adj. EBITDA ($B) term price fluctuations can result
Slide 91: Base Business Sales and Adj. EBITDA Projection by Commodity Price
Base Business Sales and Adj. EBITDA 1 Projection by Commodity Price Illustrative FY 2025E Assumptions ▪ Provided a grid with various commodity cost assumptions and the corresponding profits if you assume static commodity prices. Shorter Sales ($B) Adj. EBITDA ($B) term price fluctuations can result
Slide 92: 2022E to 2025E Base Business Targets – Assumptions Summary
2022E to 2025E Base Business Targets – Assumptions Summar y Starts Our Guide Additional Assumptions ▪ Base Business estimate assumes $400/mbf lumber & sheet good pricing Single-family LSD to MSD ▪ Depreciation of ~$375M and Amortization of ~$190M ▪ Tax rate of 23% to 25% Multi-family LSD ▪ Leverage
Slide 93: Reconciliations
Reconciliations BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share amounts) 2021 2020 2021 2020 Net sales $ 5,508,590 $ 2,295,450 $ 15,259,047 $ 6,028,
Slide 94: Reconciliations
Reconciliations BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) Nine Months Ended September 30, (in thousands) 2021 2020 Cash flows from operating activities: Net income $ 1,282,960 $ 173,623 Adjustments to reconcile net income to net cash provi
Slide 95: Reconciliations
Reconciliations BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) September 30, December 31, (in thousands, except per share amounts) 2021 2020 ASSETS Current assets: Cash and cash equivalents $ 224,735 $ 423,806 Accounts receivable, less allowances of $38,
Slide 96: Reconciliations
Reconciliations BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES Reconciliation of Adjusted Non-GAAP Financial Measures to their GAAP Equivalents (unaudited) Three Months Ended Nine Months Ended Twelve Months Ended September 30, September 30, September 30, (in millions) 2021 2020 2021 2020 2021 Reconcili
Slide 97: Reconciliations
Reconciliations BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES Financial Data (unaudited) Three Months Ended Nine Months Ended September 30, September 30, (in millions, except per share amounts) 2021 2020 2021 2020 Net sales $ 5,508.6 $ 2,295.5 $ 15,259.0 $ 6,028.1 Cost of sales 3,796.1 1,724.8 10,893.
Slide 98: Reconciliations
Reconciliations BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES Interest Reconciliation (unaudited) Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 Interest Net Debt Interest Net Debt (in millions) Expense Outstanding Expense Outstanding 2032 Unsecured notes @ 4.25% $ 8.1 $ 1,
Slide 99: Reconciliations
Reconciliations BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES Sales by Product Category (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 % of % of % % of % of % (in millions) Net Sales Net Sales Net Sales Net Sales Change Net Sales Net Sales Net Sales Ne
Slide 100: Reconciliations
Reconciliations BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES Combined Financial Data (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (in millions) (Pro Forma) (Pro Forma) Net sales $ 5,508.6 $ 3,385.8 $ 15,259.0 $ 9,019.2 Gross margin 1,712.5 844.2 4,3
Slide 101: Presenter Bios
Presenter Bios 2 0 2 1 I N V E S T O R D A Y – © B U I L D E R S F I R S T S O U R C E 101
Slide 102: Presenter Bios
Presenter Bios Dave Flitman Peter Jackson President & Chief Executive Officer Chief Financial Officer Dave Flitman is president and chief executive officer of Builders Peter Jackson is chief financial officer of Builders FirstSource. FirstSource and serves on its board of directors. Prior to the He
Slide 103: Presenter Bios
Presenter Bios Mike Farmer Lea Allah President, Commercial Operations D&I Leader and HR Director Mike Farmer is president of commercial operations at Builders Lea Allah is a regional human resources director and diversity FirstSource. He oversees the company’s health and safety and inclusion leader
Slide 104: Presenter Bios
Presenter Bios Dave Rush Tim Page EVP, IMO Leader EVP, Digital Solutions Dave Rush is executive vice president and IMO leader at Tim Page is executive vice president of digital solutions at Builders FirstSource. He is responsible for co-managing the Builders FirstSource. He is responsible for accele
Slide 105: Presenter Bios
Presenter Bios Nate Herbst Mike Neese SVP of Product Development, Paradigm SVP, Investor Relations Nate Herbst is senior vice president of product development, Mike Neese is a proven executive with over 20 years of Paradigm at Builders FirstSource. Notably, he is a Founder of experience working with