Ufp Industries, Inc. · NASDAQ:UFPI
Ufp Industries — Investor Presentation (April 2022)
56 slides from Ufp Industries's investor presentation, Apr 25, 2022
Slide 1: 2022 Investor Relations Presentation
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Slide 2: Forward-looking statements
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,
Slide 3: UFP Industries holding company description
3 UFP Industries is a holding company whose operating subsidiaries – UFP Industrial, UFP Construction and UFP Retail Solutions – manufacture, distribute and sell a wide variety of value - added products used in residential and commercial construction, packaging and other industrial applications worl
Slide 4: Our Performance
4 BUSINESS MODEL OUR PERFORMANCE 2022 7.2% Adjusted EBITDA Margin 8.4% 9.7% $4,416 Net Sales $5,154 $8,636 $180 Net Earnings (ACI) $247 $536 0.0 Net Debt to Adjusted EBITDA 0.0 0.06 $317 Adjusted EBITDA $431 $835 15.1% ROIC 21.0% 32.2% 2019 2020 2021 Unit sales growth rate 6% 6% 28% 19% 36% 94% $ Sa
Slide 5: Who We Are
5 Company founded in Grand Rapids, MI 1955 INTRODUCTION WHO WE ARE Number of employees worldwide 15,000+ Number of facilities worldwide 208 2022 2021 Revenue $8.6B 2021 Adjusted EBITDA $835M $ Please go here for the UFP Industries 2022 ESG Disclosure. Non - GAAP Financial Information: Please click h
Slide 6: Where We Are
6 INTRODUCTION WHERE WE ARE 2022 183 2 4 1 11 1 5 GLOBAL LOCATIONS 208 1
Slide 7: Our Customers
7 Industrial - $2.1B Big box, independents, & buying co - ops Single and multi - family builders, commercial builders, concrete formers, factory - built housing (mobile & modular homes) & RVs Industrial packaging, packaging materials & OEM components Based on 2021 Sales INTRODUCTION OUR CUSTOMERS Re
Slide 8: Sustainability Continuum
8 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 products
Slide 9: Our Sustainability Philosophy
9 2022 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 sust
Slide 10: UFP Industries Business Segments
10 UFP INDUSTRIES BUSINESS SEGMENTS
Slide 11: Retail Solutions
11 We manufacture and sell on - trend brands to all major building products retailers, while supporting our customers with best - in - class in - store and e - commerce support. BUSINESS SEGMENTS RETAIL SOLUTIONS 2022 2021: ProWood - $1,350M, Outdoor Essentials - $393M, Deckorators - $249M, UFP Edge
Slide 12: Deckorators
12 The industry’s leading innovator of composite decking, railing and accessories. Deckorators.com BUSINESS SEGMENTS RETAIL SOLUTIONS 2022
Slide 13: ProWood
13 Preserved lumber including timbers, decking, construction materials and fire - treated. BUSINESS SEGMENTS RETAIL SOLUTIONS ProWoodLumber.com 2022
Slide 14: UFP Edge
14 UFPEdge.com Premium siding, pattern, trim and accent wall products. BUSINESS SEGMENTS RETAIL SOLUTIONS 2022
Slide 15: Outdoor Essentials
15 OutdoorEssentialProducts.com Outdoor lifestyle products including wood and vinyl fencing, landscape and garden décor, picnic tables, pergolas, trellises and more. BUSINESS SEGMENTS RETAIL SOLUTIONS 2022
Slide 16: Handprint
16 Coming soon: Handprintmade.com Wood components and ready - to - make products for a variety of inspired home décor and craft projects. BUSINESS SEGMENTS RETAIL SOLUTIONS 2022
Slide 17: E-Commerce
17 Supports the largest home improvement retailers in the U.S. in multichannel online B2B2C sales strategies. Provides thousands of curated products and assortments to support customers’ distribution efforts such as direct - to - home, ship - to - store, including UPS, USPS and LTL shipments. BUSINE
Slide 18: Construction segment
18 Single - source provider of concrete forms, building components, framing, exterior and interior finishing programs designed to make building processes run at maximum efficiency. BUSINESS SEGMENTS CONSTRUCTION • SITE BUILT • FACTORY - BUILT • CONCRETE FORMING • COMMERCIAL 2022 2021: Site Built - $
Slide 19: Site Built
19 SITE BUILT Roof trusses, wall panels, floor systems, doors and framing services for residential and light commercial builders. BUSINESS SEGMENTS CONSTRUCTION 2022 UFPConstruction.com
Slide 20: Factory Built
20 FACTORY BUILT Roof trusses, floor joists, laminated wall panels, cabinet components, countertops and milled components for the modular and manufactured home, RV and mobile office. BUSINESS SEGMENTS CONSTRUCTION 2022
Slide 21: Concrete Forming
21 CONCRETE FORMING BUSINESS SEGMENTS CONSTRUCTION Custom radius forms, wall and column forms, gang systems, lumber and panels. 2022
Slide 22: Commercial
22 Full - service, turnkey project management of consumer environment and architectural interiors: Design, development, engineering, manufacturing, assembly, distribution and installation. BUSINESS SEGMENTS CONSTRUCTION COMMERCIAL IDXCorporation.com 2022
Slide 23: Industrial segment
23 PP Delivering innovative structural packaging solutions backed by the industry’s leading design team, a global manufacturing footprint, and integrated hyper - responsive service teams. BUSINESS SEGMENTS INDUSTRIAL • INDUSTRIAL PACKAGING • PACKAGING MATERIALS • MANUFACTURED COMPONENTS 2022 Focus A
Slide 24: Industrial Packaging
24 Wood, steel and mixed material crates and specialty containers, hard cases, tracking technology, logistics solutions and onsite packaging services. BUSINESS SEGMENTS INDUSTRIAL INDUSTRIAL PACKAGING 2022
Slide 25: Packaging Materials
25 Products for manufacturing, energy, technology, agriculture and transportation. Stretch wrap, corrugated and boxboard, facility supplies and safety products, labels and tags, label applicators and dispensers, printers, hardware and software solutions. BUSINESS SEGMENTS INDUSTRIAL 2022 PACKAGING M
Slide 26: Manufactured Components
26 Precision - milled hardwoods, softwoods, composites and panel goods for bed foundations; cabinet components; shed, door and window companies. Laminated panels for a variety of industries. BUSINESS SEGMENTS INDUSTRIAL MANUFACTURED COMPONENTS 2022
Slide 27: UFP Global Holdings
27 UFP International actively trades lumber, packaging and building materials in 65 countries to supply local and multinational customers across major markets. Additionally, UFP has manufacturing and distribution facilities in Canada, Mexico, Italy, Australia and India to support our efforts as a gl
Slide 28: Acquisitions
28 BUSINESS MODEL ACQUISITIONS 2022 PROCESS Identify attractive growth runways in each Business Unit under each Business Segment and identify gaps in our capabilities to pursue those runways. PURPOSE Find new products and services to speed our transformation from commodity sales to value - added sel
Slide 29: 2021 Acquisitions: PalletOne
29 BUSINESS MODEL 2021 ACQUISITIONS 2022 PalletOne , Inc. PalletOne is the leading manufacturer of new pallets in the U.S., with 17 manufacturing facilities and 1,500 employees in the Southern and Eastern regions of the U.S. The company also supplies specialized industrial packaging, including custo
Slide 30: 2021 Acquisitions: Gilmores, Walnut Hollow
30 BUSINESS MODEL 2021 ACQUISITIONS 2022 Gilmores, Pty Ltd Gilmores adds a wide portfolio of consumable packaging to certain industrial packaging products and expands UFP Industrial’s customer base throughout Australia. Founded in 1988 and operating from its distribution facility in Port Melbourne,
Slide 31: 2021 Acquisitions: Spartanburg, Endurable
31 BUSINESS MODEL 2021 ACQUISITIONS 2022 Spartanburg Forest Products Corporation Acquired by UFP’s wholly - owned subsidiary Sunbelt Forest Products , Spartanburg and its affiliates are a wood treating operation in the southeastern U.S., with approximately 150 employees and operations in five states
Slide 32: 2021 Acquisitions: Shelter Products, Boxpack
32 BUSINESS MODEL 2021 ACQUISITIONS 2022 Shelter Products, Inc. Based in Haleyville, Alabama , Shelter Products, Inc. provides distribution and logistics support to factory - built manufacturers through nine warehouses across the U.S., expanding UFP’s reach in its Factory - Built business segment. 2
Slide 33: 2021 Acquisitions: Ficus Pax, Advantage Labels
33 BUSINESS MODEL 2021 ACQUISITIONS 2022 Ficus Pax Private Limited Headquartered in Bangalore, India, Ficus Pax manufactures mixed - material cases and crates, nail - less plywood boxes, wooden pallets and other packaging products through 10 facilities located in major industrial markets throughout
Slide 34: 2022 Acquisitions: Ultra Aluminum
34 BUSINESS MODEL 2022 ACQUISITIONS 2022 Ultra Aluminum Manufacturing, Inc. Located in Howell, Michigan and founded in 1996, Ultra is a leading manufacturer of aluminum fencing, gates and railing. The company designs and produces an extensive selection of ornamental aluminum fence and railing produc
Slide 35: Product Mix Evolution
35 BUSINESS MODEL PRODUCT MIX EVOLUTION 2013 60% 31% 58% 69% 42% Commodity Value - added as a percent of sales 2022 Value - added 2019 Commodity Value - added 2021 Commodity Value - added 64% 36% 2013 Note: Lumber price appreciation more significantly impacts commodity - based products compared to v
Slide 36: Product Mix Evolution: New Products
36 BUSINESS MODEL PRODUCT MIX EVOLUTION 2013 $426m 3% 10% $85m New Products 2022 2019 2021 10% $540m 2013 % of Sales Sales % of Sales Sales % of Sales Sales $842m 10% 2020 % of Sales Sales
Slide 37: How We Got Here
37 BUSINESS MODEL HOW WE GOT HERE 2022 Founded in 1955. Managers are required to own stock. Management team has an average tenure of 23 years. 2020 management realignment from geographic to business segment. International in scope, regional in focus. Local decision - making for local customers. Win
Slide 38: What Gets in Our Way
38 BUSINESS MODEL WHAT GETS IN OUR WAY General economic trends Regulatory burdens Availability of quality labor and equipment 2022
Slide 39: Long-Term Financial Goals
39 BUSINESS MODEL LONG - TERM FINANCIAL GOALS 2022 Annual unit sales growth of 5 - 7 percent, including small acquisitions 10% Adjusted EBITDA margin Earn incremental ROIC on new investment greater than WACC Maintain a conservative capital structure
Slide 40: Built for Good Times and Bad
40 Experienced Leadership BUSINESS MODEL BUILT FOR GOOD TIMES AND BAD 2022 Our profit center organization model results in a stable of seasoned leaders skilled in managing their business. These profit centers have highly variable cost structures allowing rapid adjustment to market demand and have he
Slide 41: Financials
>) UFP INDUSTRIES FINANCIALS
Slide 42: Lumber Market Impact on Operating Results
42 BUSINESS MODEL LUMBER MARKET IMPACT ON OPERATING RESULTS Goal: to earn a stable profit per unit 2022 We are less affected by the level of lumber prices than the primary producers of lumber are Level of lumber prices affects gross profit and SG&A to sales ratios Profit per unit is primarily impact
Slide 43: Lumber Market
43 1112 1225 1321 890 954 1035 1080 1428 1344 690 443 412 520 585 746 377 402 420 358 394 455 530 716 934 826 571 643 331 370 365 354 346 329 356 346 364 360 373 371 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750 $800 $850 $900 $950 $1,000 $1,050 $1,100 $1,150 $1,200 $1,250 $1,300 $1,350 $1,400 $
Slide 44: Lumber Market - SYP
44 FINANCIALS LUMBER MARKET - SYP 2022 1010 1115 1198 858 903 938 922 1150 1052 564 448 438 512 599 675 346 345 360 333 412 494 552 729 886 711 508 565 370 403 408 401 383 344 359 348 355 345 344 335 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750 $800 $850 $900 $950 $1,000 $1,050 $1,100 $1,150 $1
Slide 45: Net Sales
45 FINANCIALS 2022 NET SALES Long - Term Goal: Unit sales growth of 5% to 7%, including acquisitions Net Sales (in millions) Percent Change $3,941 $4,489 $4,416 $5,154 $8,636 15% 6% 6% 6% 28% 4% 3% 5% 5% 4% 11% 3% 1% 1% 24% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% $- $1,000 $2,000 $3,000 $4,000 $5,000
Slide 46: Unit Sales and Profit Growth
46 FINANCIALS UNIT SALES AND PROFIT GROWTH 2022 Percent Growth 15% 6% 6% 6% 28% 14% 9% 16% 17% 76% 13% 12% 19% 36% 94% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2018 2019 2020 2021 Long - Term Goal: Achieve Adjusted EBITDA growth exceeding unit sales growth. Unit Sales Growth Gross Profit Gro
Slide 47: Adjusted EBITDA
47 FINANCIALS Adjusted EBITDA 2022 Non - GAAP Financial Information: This release includes certain financial information not prepared in accordance with U.S. GAAP. Because not all companies calculate non - GAAP financial information identically (or at all), the presentations herein may not be compar
Slide 48: Margin Improvement Drivers
48 BUSINESS MODEL MARGIN IMPROVEMENT DRIVERS 2022 Operating leverage on sales growth Product mix improvements - New product and core line innovation initiatives - Enhanced capabilities drive conversion from commodity to value - added Strength of market demand Value - based pricing Automation initiat
Slide 49: Return on Invested Capital
49 FINANCIALS RETURN ON INVESTED CAPITAL 2022 Hurdle Rate = 12% WACC = 10% (1) Please click here for reconciliation to related GAAP measurement. Percent 13.2% 14.0% 15.1% 21.0% 32.2% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 2017 2018 2019 2020 2021
Slide 50: Cash Cycle
50 FINANCIALS 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 0 10 20 30 40 50 60 70 2017 2018 2019 2020 2021
Slide 51: Net Debt
51 FINANCIALS NET DEBT 2022 $ In thousands Mar - 22 Dec - 21 Dec - 20 3.89% series 2012 - A notes, Tranche A, due December 2022 $ 35,000 $ 35,000 $ 35,000 3.98% series 2012 - B notes, Tranche B, due December 2024 40,000 40,000 40,000 4.20% series 2018 - C notes, Tranche C, due June 2028 40,000 40,00
Slide 52: Capital Structure
52 FINANCIALS CAPITAL STRUCTURE 2022 Percent Net Debt to Total Capitalization vs Maximum Target Net Debt to Adjusted EBITDA vs Maximum Target 11.8% 11.5% 12.4% 0.0% 10.2% 12.8% 15.7% 0.0% 0.0% 2.5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1.10 0.80 0.72
Slide 53: Balanced Use of Free Cash Flow
53 BUSINESS MODEL BALANCED USE OF FREE CASH FLOW 2022 Current dividend rate of $0.25/quarter, increased annually based on earnings and free cash flow growth Share repurchase goal to offset issuances under share - based compensation plans (1.8M remaining share authorization) CapEx plan of $175M to $2
Slide 54: Selected Income Statement Data: 1st Quarter 22
54 FINANCIALS SELECTED INCOME STATEMENT DATA 1 st QUARTER 2022 (1) Please click here for reconciliation to related GAAP measurement. $ In thousands, except per share data Q1 2022 Q1 2021 % Change Unit % Change Retail $ 993,232 $ 759,021 30.9 12.0 Industrial 611,369 448,873 36.2 (3.0) Construction 78
Slide 55: Selected Income Statement Data: Annual Results
55 FINANCIALS SELECTED INCOME STATEMENT DATA ANNUAL RESULTS 2022 $ In thousands, except per share data 2021 2020 % Change Unit % Change Retail $ 3,418,337 $ 2,167,122 57.7 31.0 Industrial 2,148,142 1,072,117 100.4 40.0 Construction 2,698,434 1,695,683 59.1 17.0 All Other 371,221 219,076 69.4 Total N
Slide 56: Thank You
56 2801 E. Beltline Ave. NE Grand Rapids, MI 49506 (800) 598 - 9663 - UFPI.com THANK YOU.