Ufp Industries, Inc. · NASDAQ:UFPI
Ufp Industries — Q1 2023 Earnings Presentation
35 slides from Ufp Industries's earnings presentation, May 2, 2023
Slide 1: Investor Relations Presentation
Investor Relations Presentation Results through April 1, 2023
Slide 2: Forward-looking statements and non-GAAP information
UFP INDUSTRIES, INC. 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, estimates,
Slide 3: UFP Industries holding company description
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 applic
Slide 4: UFP at a Glance
UFP AT A GLANCE 1955 15,000+ 221 $9.6B $1.1B Founded in Grand Employees Facilities 2022 Net Sales 2022 Adj. EBITDA Rapids, MI worldwide worldwide Business segments and markets $3.7B in 2022 $2.4B in 2022 Big box, independents, & buying co-ops Industrial manufacturers, OEM’s, agricultural and 39% log
Slide 5: Where We Are
WHERE WE ARE 1 2 197 2 1 9 4 221 5 Locations 8 Countries
Slide 6: Long-Term Financial Goals
LONG-TERM FINANCIAL GOALS Annual unit sales Earn incremental Minimum 10% Maintain a growth of 5-7 return on new adjusted conservative capital percent, including investment EBITDA margin structure small acquisitions greater than WACC
Slide 7: Value Added Sales
VALUE ADDED SALES Commodity Value-added as a percent of sales Value-added 69% 68% 64% 63% 60% 40% 36% 37% 31% 32% 2013 2019 2020 2021 2022 Q1 2023 YTD . 2022
Slide 8: Innovation and New Products
INNOVATION AND NEW PRODUCTS Net Sales New Products $377m % of Sales Sunset Sales* $842m $736m $540m $426m 4% 10% 10% 10% 8% $5m 9% $167m 2019 2020 2021 2022 Q1 2023 YTD *This represents new product sales that were excluded because they no longer meet our definition of new products. New products are
Slide 9: UFP Venture Fund
INNOVATION AND NEW PRODUCTS UFP VENTURE FUND In 2022 we launched our In 2023 we started the UFP Innovation Accelerator to: Venture Fund to: Spur external growth through Bring new products and services to market late-stage development and early-stage faster commercialization opportunities Empower ent
Slide 10: New Structure Drives Better Strategy, Development and Execution
New Structure Drives Better Strategy, Development and Execution 1955 - 2019 2020 and Beyond Western Division Northern Division Southern Division Our new structure, based on management of market segments rather than geography, brought greater focus, effecting: • Improved alignment with our customers
Slide 11: Recent Acquisitions
RECENT ACQUISITIONS Process Purpose Goal Identify attractive growth runways in Find new products and services to Achieve scale and synergy targets to each Business Unit under each Business speed our transformation from optimize growth, margins and returns. Segment and identify gaps in our commodity
Slide 12: A Unique Culture Built for Good Times and Bad
A UNIQUE CULTURE BUILT FOR GOOD TIMES AND BAD Balanced Strong Balance Experienced Incentives Aligned Business Model Sheet Leadership With Shareholders Diversified business portfolio mitigates Every plant is a profit Return-focused Average senior lumber and center and all approach to capital manageme
Slide 13: Business Segments
BUSINESS SEGMENTS () uFP RETAIL SOLUTIONS () UFP PACKAGING @) FP CONSTRUCTION
Slide 14: UFP Retail Solutions
New Products & % of Net Sales Prowood, Sunbelt & Value-added as a % of Net Sales Net Sales Outdoor Essentials Commodity % of Sales $283m $3.2B 2022 Value-added Sunset Sales* $510m 58% $402m 54% 57% 55% DecKorators 46% 42% 43% 45% $284m $307m $326M 2022 19% 19% 15% 8% 8% UFP Edge $168M 2022 2019 2020
Slide 15: On-trend brands to all major building products retailers
Pressure-treated decking, Outdoor lifestyle products including The industry’s leading Premium siding, pattern, trim; timbers, panels and wood and vinyl fencing, landscape and innovator of composite interior accent wall products construction materials, garden décor, picnic tables, pergolas, decking,
Slide 16: UFP Packaging
New Products & % of Net Sales Value-added as a % of Net Sales Net Sales Structural Packaging Commodity $38m $1.9B 2022 % of Sales Value-added $278m 72% Sunset Sales* 66% 68% 65% $177m PalletOne 2% $399M 2022 34% 35% 32% 12% 28% 8% $69m 6% $73m 7% Protective Packaging Solutions 2019 2020 2021 2022 $5
Slide 17: Structural Packaging, PalletOne, Protective Packaging
PROTECTIVE PACKAGING STRUCTURAL PACKAGING PALLETONE SOLUTIONS Wood, steel, foam and corrugated for mixed material crates Machine-built pallets, design, Corrugated conversion, stretch/shrink films, labels, and specialty containers. Hard cases, lumber processing, engineering and testing strapping, har
Slide 18: UFP Construction
New Products & % of Net Sales Site-Built Value-added as a % of Net Sales Net Sales $39m $1.4B 2022 Commodity % of Sales Value-added $148m 81% Factory-Built Sunset Sales* $136m 76% 77% 73% $1.2B 2022 $60m 1% Commercial $54m 5% 5% 27% 4% 3% $336M 2022 19% 24% 23% Concrete Forming 2019 2020 2021 2022 $
Slide 19: Site-Built, Factory-Built, Commercial, Concrete Forming
CONCRETE SITE-BUILT FACTORY-BUILT COMMERCIAL FORMING Roof trusses, wall panels, floor Roof trusses, floor joists, laminated Turnkey project management of systems, doors and framing wall panels, cabinet components, consumer environment and Lumber and panels; designed, services for residential and lig
Slide 20: International lumber trading and packaging manufacturing
Lumber trading in 65 countries. Industrial packaging solutions manufacturing in Australia, Mexico, Canada, Italy and India. 2022 Net Sales: $409 million
Slide 21: Sustainability Continuum
SUSTAINABILITY CONTINUUM For UFP, sustainability means more than using and selling renewable materials. It serves our ultimate goal of creating and sustaining value for shareholders. Cultivate a unique, Drive rewarding operational Maintain Provide culture excellence inclusive, safe significant throu
Slide 22: Our Sustainability Philosophy
OUR SUSTAINABILITY PHILOSOPHY For UFP Industries, doing right doesn’t require departments and We believe profitability, asset values and shareholder return are titles, but is simply part of who we’ve been and who we continue optimized by acting responsibly, and that our investors to be. And that’s h
Slide 23: Financials
FINANCIALS (§) UFP INDUSTRIES
Slide 24: Our Performance
OUR PERFORMANCE Net Sales Adjusted EBITDA Adjusted EBITDA Margin $ Sales in Millions 31% 28% 2019 94% 6% 6% 2% 36% 2020 19% $4,416 $5,154 $8,636 $9,627 $317 $431 $835 $1,097 7.2% 8.4% 9.7% 11.4% 2021 Net Earnings (ACI) ROIC Net Debt to Adjusted EBITDA 2022 29% 117% Unit sales growth rate 37% Growth
Slide 25: Managing Lumber Market Risk
MANAGING LUMBER MARKET RISK 50% 50% Level of lumber prices does 39.9% 39.9% Lumber Market Volatility* not drive profitability 40% 40% Adjusted EBITA Margin 34.5% Sequential trends impact 30% 30% profit per unit 20% 20% 11.4% Balanced mix of variable and fixed- 9.7% 11.1% 8.4% price products mitigate
Slide 26: Net Sales (in millions)
NET SALES (in millions) UFP Consolidated UFP Retail Solutions $12,000 55% $4,500 80% $10,000 $9,627 45% $3,750 $3,651 65% $3,418 $8,636 Percent Change Percent Change Net Sales $8,000 28% 35% $3,000 50% Net Sales $2,167 31% $6,000 $5,154 25% $2,250 35% $4,416 25% $1,499 $4,000 15% $1,500 24% 20% 6% 6
Slide 27: Adjusted EBITDA (in millions)
ADJUSTED EBITDA (in millions) UFP Consolidated UFP Retail Solutions $1,200 18% $250 12% $1,097 Adjusted EBITDA Margin Adjusted EBITDA Margin $1,000 16% $200 $180 10% $835 $170 Adjusted EBITDA Adjusted EBITDA 14% $151 $800 12% $150 8% $600 $431 11.4% 10% 7.8% $100 $75 6% $400 $317 9.7% 8% 8.4% $50 5.
Slide 28: Adjusted EBITDA Growth and Unit Sales
ADJUSTED EBITDA GROWTH AND UNIT SALES UFP Consolidated UFP Retail Solutions 100% 160% 127% 80% 94% 110% Percent Growth Percent Growth 60% 60% 36% 25% 31% 40% 28% 19% 31% 18% 19% 10% (11)% 20% 10% 6% 6% 2% 0% 0% -40% 2019 2020 2021 2022 2019 2020 2021 2022 UFP Packaging UFP Construction 220% 180% 180
Slide 29: Return on Invested Capital
RETURN ON INVESTED CAPITAL 40% 34.6% 35% 32.2% 30% 25% 21.0% Percent 20% Hurdle Rate = 20% 15.1% 15% 10% WACC = 10% 5% 0% 2019 2020 2021 2022 Long-Term Goal: Earn an incremental return on new investment over our WACC Non-GAAP Financial Information: Please visit ufpinvestor.com for reconciliation to
Slide 30: Cash Cycle
CASH CYCLE 80 71 70 65* 64* 64* 60 56* Days 50 40 30 20 10 0 2019 2020 2021 2022 Q1 2023 YTD Cash Cycle = Days Receivables Outstanding + Days Supply of Inventory – Days Payables Outstanding * Within the cash cycle, we’ve modified our calculation of days payables outstanding to be based on the cost o
Slide 31: Balanced Use of Free Cash Flow
BALANCED USE OF FREE CASH FLOW Acquisitions to contribute Operating Cash Flow and Capital Allocation half of our total annual (in millions) unit sales growth Acquisitions CapEx plan of $200M to Capex $225M in 2023 Share Buyback Dividends OCF Opportunistic share repurchases $476 $832 $180 to offset i
Slide 32: Capital Structure
CAPITAL STRUCTURE Net Debt to Total Capitalization Net Debt to Adjusted EBITDA vs Maximum Target vs Maximum Target 45% 2.5 40% 35% 2.0 30% 1.5 Percent 25% 20% 15.7% 1.0 0.8 15% 10% 0.5 2.5% 5% - 0.1 0.0% 0.0% 0.0% 0.0% - - - 0% 0.0 2018 2019 2020 2021 2022 Q1 2023 2018 2019 2020 2021 2022 Q1 2023 Ne
Slide 33: Net Sales Q1 2023 (in millions)
NET SALES Q1 2023 (in millions) UFP Consolidated UFP Retail Solutions $2,901 $1,121 $2,489 $993 $2,323 $845 $1,914 $1,822 $750 10% 12% $691 3% 5% 6% 3% (2)% 3% (7)% (6)% 2% (9)% 3% (9)% (8)% (2)% (2)% (10)% (7)% (11)% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 UF
Slide 34: Adjusted EBITDA Q1 2023 (in millions)
ADJUSTED EBITDA Q1 2023 (in millions) UFP Consolidated UFP Retail Solutions $319 $78 $292 $274 $213 $202 $49 11.7% 11.8% $31 $36 $34 7.9% 6.6% 11.0% 11.1% 11.1% 4.2% 5.0% 2.8% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 UFP Packaging UFP Construction $105 $138 $92
Slide 35: Thank You
THANK YOU 2801 E. Beltline Ave. NE Grand Rapids, MI 49506 (800) 598-9663 - UFPI.com