Ufp Industries, Inc. · NASDAQ:UFPI
Ufp Industries — Investor Presentation (March 2023)
32 slides from Ufp Industries's investor presentation, Mar 1, 2023
Slide 1: 2023 Investor Relations Presentation
1 2023 Investor Relations Presentation Results through December 31, 2022
Slide 2: Forward-looking statements and non-GAAP information
2 UFP INDUSTRIES, INC. 2022 Please be aware that statements included in this presentation that are not historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, and are based on management’s beliefs, assumptions, current expectations, est
Slide 3: UFP Industries holding company overview
3 UFP Industries is a holding company whose operating subsidiaries – UFP Packaging, UFP Construction and UFP Retail Solutions – manufacture, distribute and sell a wide variety of value-added products used in residential and commercial construction, outdoor living, packaging and other industrial appl
Slide 4: UFP at a Glance
4 39% 32% 25% 4% Based on 2022 Net Sales I NT R O DU CT I O N UFP AT A GLANCE Retail - $3.7B in 2022 Big box, independents, & buying co-ops Construction - $3.1B in 2022 Single- and multi-family builders, commercial builders, concrete formers, factory-built housing (mobile & modular homes) & RVs 2022
Slide 5: Where We Are
5 I NT R O DU CT I O N WHERE WE ARE 2022 193 2 4 1 11 1 5 218 Locations 1
Slide 6: Long-Term Financial Goals
6 BU S I NE S S M O DE L LONG-TERM FINANCIAL GOALS 2022 Annual unit sales growth of 5-7 percent, including small acquisitions 10% Adjusted EBITDA margin Earn incremental return on new investment greater than WACC Maintain a conservative capital structure
Slide 7: Innovation and New Products
7 BU S I NE S S M O DE L INNOVATION AND NEW PRODUCTS 2013 $426m 3% 10% $85m New Products 2022 10% $540m Sales % of Sales Sales % of Sales Sales % of Sales $842m 10% Sales % of Sales 2013 2020 2019 2021 $736m Sales % of Sales 2022 8% 4%* $377m* *This represents the new product sales, while still sold
Slide 8: New Structure Drives Better Strategy, Development and Execution
8 New Structure Drives Better Strategy, Development and Execution Western Division Southern Division Northern Division 2020 and Beyond 1955 - 2019 2020 and Beyond Our new structure, based on management of market segments rather than geography, brought greater focus, effecting: • Improved alignment w
Slide 9: A Unique Culture Built for Good Times and Bad
9 BU S I NE S S M O DE L A UNIQUE CULTURE BUILT FOR GOOD TIMES AND BAD Strong Balance Sheet Return-focused approach to capital allocation. Capital reserves used opportunistically. Average senior management team tenure: 22.3 years. 67 straight years of profitability. Every plant is a profit center an
Slide 10: Business Segments
10 U F P I ND U S T R I E S BUSINESS SEGMENTS 2022
Slide 11: Business Segments: Retail Solutions
11 BU S I NE S S S E G M E NT S 2022 2013 Value-added as a % of Net Sales 2013 $284m 19% 15% $402m $510m 19% Sales % of Sales Commodity Value-added 2019 2020 2021 58% 42% 46% 43% 57% Sunbelt 54% $924M 2022 DecKorators** $326M 2022 UFP Edge $168M 2022 Prowood* $2.2B 2022 *Includes $393M in Outdoor Es
Slide 12: Retail Solutions brands
12 Deckorators.com BU S I NE S S S E G M E NT S RETAIL SOLUTIONS ProWoodLumber.com OutdoorEssentialProducts.com UFPEdge.com Outdoor lifestyle products including wood and vinyl fencing, landscape and garden décor, picnic tables, pergolas, trellises and more. Premium siding, pattern, trim; interior ac
Slide 13: Business Segments: Packaging
13 2022 2013 $69m 6% New Products & % of Net Sales $73m 8% $177m 7% Sales % of Sales 2013 35% 66% 34% 68% 32% 65% Commodity Value-added Value-added as a % of Net Sales UFPpackaging.com Protective Packaging Solutions $57M 2022 BU S I NE S S S E G M E NT S PalletOne $399M 2022 2019 2020 2021 72% 28% 2
Slide 14: Packaging offerings
14 BU S I NE S S S E G M E NT S PACKAGING Corrugated, stretch/shrink films, labels, machine applicators, facility supplies, hardware and software solutions for all industries. PROTECTIVE PACKAGING Wood, steel, foam and corrugated for mixed material crates and SOLUTIONS specialty containers. Hard cas
Slide 15: Business Segments: Construction
15 BU S I NE S S S E G M E NT S 2022 2013 $148m $60m 4% $54m 5% $136m 3% Sales % of Sales 2013 24% 81% 19% 73% 27% 76% Commodity Value-added Value-added as a % of Net Sales Factory-Built $1.2B 2022 Commercial $336M 2022 Concrete Forming $264M 2022 Site-Built $1.4B 2022 New Products & % of Net Sales
Slide 16: Construction offerings
16 Roof trusses, wall panels, floor systems, doors and framing services for residential and light commercial builders. Sales are 75% single family, 25% multifamily. Roof trusses, floor joists, laminated wall panels, cabinet components, countertops and milled components for modular and manufactured h
Slide 17: Business Segments: International
17 Lumber trading, packaging and building materials in 65 countries to supply local and multinational customers across major markets. Global industrial packaging solutions provider with manufacturing and distribution facilities in Canada, Mexico, Italy, Australia and India. BU S I NE S S S E G M E N
Slide 18: Sustainability Continuum
18 SUSTAINABILITY CONTINUUM 2022 Drive operational excellence throughout the enterprise Cultivate a unique, rewarding culture throughout the UFP family of companies Provide significant opportunity for professional and personal growth Support communities in which we operate Supply exceptional product
Slide 19: Our Sustainability Philosophy
19 OUR SUSTAINABILITY PHILOSOPHY We have always believed profitability, asset values and shareholder return are optimized by acting responsibly, and that our investors experience higher sustainable returns when we support our customers, employees and communities . Our views on maintaining a sustaina
Slide 20: Financials
UFP INDUSTRIES FINANCIALS
Slide 21: Our Performance
21 OUR PERFORMANCE 7.2% Adjusted EBITDA Margin $4,416 8.4% 9.7% Net Sales $5,154 $8,636 $180 Net Earnings (ACI) $247 $536 0.0 Net Debt to Adjusted EBITDA 15.1% 0.0 0.06 ROIC 21.0% 34.6% 2019 2020 2021 Unit sales growth rate 6% 6% 28% $ Sales in Millions Growth rate 21% 37% 117% $317 Adjusted EBITDA
Slide 22: Managing Lumber Market Risk
22 MANAGING LUMBER MARKET RISK Level of lumber prices does not drive profitability Sequential trends impact profit per unit Balanced mix of variable and fixed-price products mitigate risk Adjusted EBITA Margin Lumber Market Volatility* 4.2% 34.5% 39.9% 39.9% 7.2% 8.4% 9.7% 11.4% 0% 10% 20% 30% 40% 5
Slide 23: Net Sales
23 FI NA NCI A LS 2022 NET SALES (in millions) Long-Term Goal: Unit sales growth of 5% to 7%, including small acquisitions. Net Sales Percent Change $4,416 $5,154 $8,636 $9,627 6% 6% 28% 2% 5% 5% 4% (1)% -5% 5% 15% 25% 35% 45% 55% $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 Organic Unit Sales Gro
Slide 24: Adjusted EBITDA
24 UFP Consolidated UFP Packaging UFP Retail Solutions UFP Construction FI NA NCI A LS ADJUSTED EBITDA (in millions) 2022 Non-GAAP Financial Information: Please click here for reconciliation to related GAAP measurement. Adjusted EBITDA Adjusted EBITDA Margin Adjusted EBITDA Adjusted EBITDA Margin $3
Slide 25: Adjusted EBITDA Growth and Unit Sales
25 UFP Consolidated UFP Packaging UFP Retail Solutions FI NA NCI A LS ADJUSTED EBITDA GROWTH AND UNIT SALES 2022 Percent Growth 6% 6% 28% 2% 19% 36% 94% 31% 0% 20% 40% 60% 80% 100% 2019 2020 2021 2022 Adjusted EBITDA Growth Unit Sales Growth Long-Term Goal: Achieve Adjusted EBITDA growth exceeding u
Slide 26: Return on Invested Capital
26 FI NA NCI A LS RETURN ON INVESTED CAPITAL Hurdle Rate = 20% Percent 13.2% 14.0% 15.1% 21.0% 32.2% 34.6% 0% 5% 10% 15% 20% 25% 30% 35% 40% 2017 2018 2019 2020 2021 2022 Long-Term Goal: Earn an incremental return on new investment over our WACC. WACC = 10% 2022 Non-GAAP Financial Information: Pleas
Slide 27: Cash Cycle
27 FI NA NCI A LS CASH CYCLE 2022 Cash Cycle = Days Receivables Outstanding + Days Supply of Inventory – Days Payables Outstanding Days 52.4 54.1 55.7 48.1 56.8 56.4 0 10 20 30 40 50 60 70 2017 2018 2019 2020 2021 2022
Slide 28: Balanced Use of Free Cash Flow
28 BALANCED USE OF FREE CASH FLOW Acquisitions to contribute half of our total annual unit sales growth CapEx plan of $200M to $225M in 2023 Opportunistic share repurchases to offset issuances Increasing dividends $349 $336 $512 $832 $25 $31 $40 $59 $29 $96 $85 $89 $151 $174 $39 $65 $476 $180 Acquis
Slide 29: Capital Structure
29 FI NA NCI A LS CAPITAL STRUCTURE Percent Net Debt to Total Capitalization vs Maximum Target Net Debt to Adjusted EBITDA vs Maximum Target 12.8% 15.7% 0.0% 0.0% 2.5% 0.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 2017 2018 2019 2020 2021 2022 0.60 0.80 - - 0.06 - 0.0 0.5 1.0 1.5 2.0 2.5 2017 2018 2019
Slide 30: Net Sales Q4 2022
30 FI NA NCI A LS 2022 NET SALES Q4 2022 (in millions) $2,489 $2,901 $2,323 $1,914 Q1 2022 Q2 2022 Q3 2022 Q4 2022 UFP Consolidated Organic Unit Sales YOY Growth Total Unit Sales YOY Growth Net Sales $993 $1,121 $845 $691 Q1 2022 Q2 2022 Q3 2022 Q4 2022 UFP Retail Solutions $611 $676 $585 $522 Q1 20
Slide 31: Adjusted EBITDA Q4 2022
31 FI NA NCI A LS 2022 ADJUSTED EBITDA Q4 2022 (in millions) $2.9 $2.0 $2.1 $292 $319 $274 $213 Q1 2022 Q2 2022 Q3 2022 Q4 2022 UFP Consolidated Adjusted EBITDA Adjusted EBITDA Margin $2.9 $2.0 $2.1 $78 $31 $36 $34 Q1 2022 Q2 2022 Q3 2022 Q4 2022 UFP Retail Solutions $2.9 $2.0 $2.1 $92 $105 $90 $89
Slide 32: Thank You
32 2801 E. Beltline Ave. NE Grand Rapids, MI 49506 (800) 598-9663 - UFPI.com THANK YOU.