Slide 1: Investor Day 2023
OUTPERFORM TODAY. TRANSFORM TOMORROW. Investor Day 2023 AT L A N TA , G A 12.05.23
Slide 2: Welcome and Opening Remarks
Welcome and Opening Remarks HEATHER KOS • SVP, Investor Relations I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 2
Slide 3: Safe Harbor and Non-GAAP Financial Measures
Safe Harbor and 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
Slide 4: Today's Agenda
Today’s Agenda 8:30 AM Welcome and Opening Remarks 10:10 AM Elevating Commercial Excellence HEATHER KOS • SVP, Investor Relations MIKE FARMER • President, Commercial Operations Differentiated, Established Market Leader Accelerating Industry-Leading DAVE RUSH • President & Chief Executive Officer Dig
Slide 5: Differentiated, Established Market Leader
Differentiated, Established Market Leader DAVE RUSH • President & Chief Executive Officer I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 5
Slide 6: Key Messages
Key Messages 1 Creating opportunity by addressing builder problems and delivering value-added products and solutions across cycles; strong track record and experienced management team 2 Investing for growth through new digital innovations and building science that will deliver greater efficiency acr
Slide 7: Builders FirstSource Snapshot
Builders FirstSource Snapshot (NYSE: BLDR) KEY STATS NATIONAL REACH. LOCAL EXPERTISE. Irving, TX ~$16.5B ~30K $16.8 – 17.1B $2.7 – 2.8B $1.8 – 2.0B Headquarters Market-Cap1 Employees2 Net Sales2 Adj. EBITDA2 FCF2 ~51% Value-Added Product Mix 24% 24% 20% Product 2023E Net Sales End Locations: Categor
Slide 8: Company History – Respect the Past, Embrace the Future
Company History – Respect the Past, Embrace the Future Builders FirstSource BFS and BMC Acquired WTS Successfully acquired ProBuild, merge, creating nation’s Paradigm, a software Builders’ Supply navigated creating a national premier supplier of building solutions and services & Lumber Co. Great Rec
Slide 9: Our Mission, Vision, and Values
Our Mission, Vision, and Values MISSION VALUES VISION To be the best supplier of At the center of everything we do – from the boardroom to the building materials and To make the dream of home jobsite, they define the Builders FirstSource culture and guide ownership more achievable services by having
Slide 10: Since 2021 Investor Day, We Continue to Transform the Homebuilding Industry
Since 2021 Investor Day, We Continue to Transform the Homebuilding Industry Key Accomplishments ▪ Delivered organic sales growth and Continued Leadership Focus margin expansion ▪ Support BFS’ exceptional leadership team with ▪ Drove strong M&A execution and track record an average of >30 years indus
Slide 11: Well-Positioned for Above-Market Growth in the Future
Well-Positioned for Above-Market Growth in the Future $16.8-17.1B BLDR 2023E Revenue1,2 Total Addressable Market ( % BLDR Share) Positive Momentum and Clear Path Toward Additional Share Gains Driven by Growing wallet share with 1 ~11% existing customers ~1% ~$110B ~$140B ~2% 2 Expanding product offe
Slide 12: Long-Term Housing Tailwinds Remain Supportive
Long-Term Housing Tailwinds Remain Supportive Housing Starts (000s) Housing Starts YoY Growth in Households (000s) Cumulative Underbuilt Homes By 2022 Population Estimates, Only 10.4% of the 3,500 Cohort Aged 25-34 Are Homeowners 3,000 2,550 2,500 Underbuilt by ~1.7M – 3.5M 2,150 Homes Since 2010 1,
Slide 13: Our Sustainable Competitive Advantages
Our Sustainable Competitive Advantages PEOPLE SCALE PRODUCT DIGITAL ▪ Hire, train, and retain best ▪ Remain focused in top ▪ Focus on value-add to ▪ Continue to lead the people in industry through MSAs – currently serving address customer needs industry in developing talent leadership programs, 89 o
Slide 14: Our I-TEAM Operating System Continues to Drive Strategic Growth Priorities
Our -TEAM Operating System Continues to Drive Strategic Growth Priorities Building People Experienced field leadership and management working to develop the next generation of talent supported by a strong, inclusive culture and values- driven approach Building Excellence Drive >$100M in annual effic
Slide 15: Clear Strategic Pillars Driving Long-Term Profitable Growth
Clear Strategic Pillars Driving Long-Term Profitable Growth Organic Invest in Continue to Disciplined Growth of Innovation Build Our High- Capital Value-Added and Drive Performing Allocation Products and Operational Culture Services Excellence Continuing to Compound Value Creation with Strong Execut
Slide 16: Significant Upside Potential in Value-Added Products and Services
Significant Upside Potential in Value-Added Products and Services ▪ Accelerate Market Penetration – Capture Single-Family potential, especially in underserved regions and product categories – Grow Multi-Family and pro-remodeling segments in targeted markets ▪ Offer Innovative Solutions for Customer
Slide 17: Future Opportunity – Focused Investment in Building Science
Future Opportunity – Focused Investment in Building Science Path to Success ▪ Partnering with key customers and intentionally engaging with cutting-edge homebuilding products and technology ▪ Investing in promising early-stage technologies provides opportunities to leverage our market-leading distri
Slide 18: Commitment to Operational Excellence and Innovation
Commitment to Operational Excellence and Innovation Create Value through Continuous Innovation and Efficiency are Improvement Initiatives Key Differentiators Scale and ▪ PIM and SKU Consolidation ▪ Investment in value-added solutions Integration ▪ Strategic Centralization ▪ Leader in truss automatio
Slide 19: Continuing to Build Our High-Performing Culture
Continuing to Build Our High-Performing Culture Key Focus Areas ▪ Promote career growth through enhanced leadership development programs and proprietary courseware – ~20,000 professional development and leadership training classes completed since 2021 Investor Day ▪ Roll out improved work/life benef
Slide 20: Accelerating Our ESG Journey
Accelerating Our ESG Journey Key ESG Accomplishments ✓ Launched inaugural ESG report in May 2022 and released latest report in May 2023 Environmental Social Governance ✓ Disclosed our Scope 1 and Scope 2 greenhouse gas emissions for the Focus on Green, Commitment to Safety and Disciplined Pursuit fi
Slide 21: Experienced Leadership Team Focused on Execution
Experienced Leadership Team Focused on Execution Dave Rush Peter Jackson Steve Herron Amy Bass Tim Johnson Tim Page Chief Executive Chief Financial Chief Operating Messersmith EVP, Legal, Safety, EVP, Digital Officer Officer Officer Chief People Officer and ESG Solutions Mike Farmer Mike Hiller Scot
Slide 22: Experienced and Diversified Board of Directors
Experienced and Diversified Board of Directors Skills Matrix Business Development / M&A 100% Finance 90% Public Company Director 80% Paul Levy Mark Alexander Cory Boydston Dirkson Charles Cleveland Christophe Director & Chairman Founder, Chairman, Former CFO, Ashton Founder and CEO, Former President
Slide 23: Disciplined Capital Allocation
Disciplined Capital Allocation 2022-2023E1 Capital Deployed: $6.1B Consistent Capital Allocation Priorities $0.8B 1. Maintain Strong Balance Sheet $0.9B ▪ Target Base Business leverage ratio of 1.0x to 2.0x 2. Organic Growth ▪ Drive productivity and growth with growth $4.4B investments 3. Inorganic
Slide 24: Our Digital Platform to Fuel Long-Term Growth
Our Digital Platform to Fuel Long-Term Growth Digitizing Homebuilding and DIGITAL INNOVATIONS INDUSTRY LEADER Materials Sourcing ~$110B SINGLE-FAMILY HOMES1 – U.S. NEW CONSTRUCTION 1 2 3 BUILDING MATERIALS (TTM Sept. 2023) Faster, Increased Design Greater Control SHARE GROWTH Providing digital solut
Slide 25: New 2026E Base Business Targets
New 2026E Base Business Targets 2021-2025E Targets PROGRESS 2024E-2026E (Announced at Dec. 2021 TO DATE1 TARGETS Investor Day) Revenue ~10% CAGR ~3% CAGR ~9% CAGR Adj. EBITDA ~15% CAGR ~13% CAGR ~12% CAGR ~50 bps ~115 bps ~30 bps Adj. EBITDA Expansion Expansion Expansion Margin Annually Annually Ann
Slide 26: Driving Operational Excellence: Winning Together as I-TEAM
Driving Operational Excellence: Winning Together as STEVE HERRON • Chief Operating Officer I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 26
Slide 27: SOURCE
I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 27
Slide 28: Key Messages
Key Messages 1 Building our people with a deep focus on safety, talent development, training, and retention to maximize customer service 2 Building excellence through clear operational and productivity improvement initiatives to deliver innovative products and services addressing customer needs 3 Bu
Slide 29: Building People
Building People SAFETY TRAINING ENGAGEMENT Continuously driving Consistent onboarding Tracking team member safety initiatives to full and new team member engagement annually integration within our training culture ~5% YoY ▪ Incentive structure tied to Implemented >100 Engagement safety results leade
Slide 30: Building Excellence
Building Excellence OPERATIONS COST COMMERCIAL EXCELLENCE PRODUCTIVITY EXCELLENCE Producing highest Continuous Fully integrated sales quality products to drive improvement mindset team to best serve customer satisfaction customers; incentives ▪ Technology (e.g., digital and automation) aimed aligned
Slide 31: Case Study | Optimizing Footprint to Lower Costs and Leverage Scale
Case Study | Optimizing Footprint to Lower Costs and Leverage Scale… Background Operational Excellence in Action Results Merger with BMC ▪ Consolidated 3 distribution yards due to general overlap – Minimal impact to growth capacity $2.5M-$3.0M ▪ #1 player in vibrant, Annual Overhead highly competiti
Slide 32: Supply Chain Optimization Efforts
Supply Chain Optimization Efforts COST CATEGORY RISK MANAGEMENT MANAGEMENT MITIGATION ▪ Executing opportunities to ▪ Maximizing spend with ▪ Aligning costs to utilize our scale and the right supply partners revenue and driving achieve lower landed consistently higher cost by: ▪ Standardizing SKUs fo
Slide 33: Delivering Productivity through Targeted Initiatives
Delivering Productivity through Targeted Initiatives ACHIEVEMENTS SINCE 2021 INVESTOR DAY Near-Term Efficiency Targets ▪ Productivity: ~$275M1 of cumulative productivity ▪ Improve fleet utilization with ~20% improvement savings, exceeding our $100M annual target driven in truck turnaround times by i
Slide 34: Building Growth
Building Growth CORE GROWTH INNOVATION M&A Delivering an end-to-end Laser-focused on Disciplined and prudent digital platform to customer-centric tuck-in M&A within a transform homebuilding, innovation – partnering fragmented market to extending market with our largest customers increase: leadership
Slide 35: Capitalizing on Industry-Leading Value-Added Footprint
Capitalizing on Industry-Leading Value-Added Footprint ▪ Current footprint and capabilities ~$130M – Components (truss & wall panels): >160 operations – Added >30 new operations since 2021 Truss Plant Investment – Millwork: >120 operations – Added >25 new operations since 2021 Since 2020 ▪ Fully int
Slide 36: Capturing Significant Growth Opportunity in Install Operations
Capturing Significant Growth Opportunity in Install Operations ~$2.5B 2023E Install Sales (~15% of Total Revenue)1 ▪ Value-added opportunity for both BFS and customers – Providing bundled solutions with labor as a Top Product Opportunities service to address customers’ shortage of labor availability
Slide 37: Key Takeaways
Key Takeaways 1 2 3 Building our people Building excellence Building growth with a deep focus on through clear operational with an emphasis on safety, talent development, and productivity organic growth initiatives training, and retention to improvement initiatives to and select, disciplined maximiz
Slide 38: Delivering Sustainability While Continuing to Build Our High Performing Culture
Delivering Sustainability While Continuing to Build Our High Performing Culture TIM JOHNSON • EVP, Legal, Safety & ESG AMY BASS MESSERSMITH • Chief People Officer I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 38
Slide 39: Key Messages
Key Messages 1 Driving a clear and differentiated ESG strategy to outperform today and transform tomorrow 2 Empowering customers with industry-leading solutions to enable a sustainable future and drive profitable growth 3 Building on our strong, inclusive culture and values-driven approach to attrac
Slide 40: ESG Strategic Framework
ESG Strategic Framework Customers Operations Communities Team Members Provide innovative Operate effectively Make a positive Foster a workplace solutions for and efficiently impact in the where safety, careers, more sustainable to drive long-term local communities and diverse operations value we ser
Slide 41: Sustainably Innovating to Create Customer Value
Sustainably Innovating to Create Customer Value… ▪ Leader in offsite manufacturing – Addresses real customer needs, including labor availability and speed to build – Independent study confirms value creation of components vs. traditional stick frame • Faster: ~2.5x faster to build homes with compone
Slide 42: Operating More Sustainably with a Clear Focus on Our Environmental Impact
Operating More Sustainably with a Clear Focus on Our Environmental Impact Committed to Continuing to Reduce Our Environmental Footprint Sustainable Sourcing ▪ Implementing nationwide delivery routing system to maximize vehicle efficiency and minimize emissions Sourcing >90% of wood from the Sustaina
Slide 43: Dedicated to Serving Our Local Communities
Dedicated to Serving Our Local Communities BFS Cares Enduring Partnership with LLS Created to help team members facing financial hardship immediately after a natural disaster or unforeseen personal hardship 17 $11M #1 years of raised for National ▪ Provides a tax-free grant ranging from support LLS
Slide 44: Continuing to Build Our High-Performing Culture
Continuing to Build Our High-Performing Culture AMY BASS MESSERSMITH • Chief People Officer I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 44
Slide 45: Industry-Leading Approach to Talent Development Drives Competitive Differentiation
Industry-Leading Approach to Talent Development Drives Competitive Differentiation WE’RE A WE MAKE PEOPLE FIRST A LOCAL TEAM. IMPACT. WE GROW WE GIVE CAREERS BACK. FROM WITHIN. I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 45
Slide 46: Attracting Top Talent and Team Member Retention and Development
Attracting Top Talent and Team Member Retention and Development WE ARE A VALUES-DRIVEN DEFINED CLEAR ELEVATED TOTAL DROVE A CULTURE ORGANIZATION CAREER PATHS REWARDS OF ENGAGEMENT ▪ Established -TEAM ▪ Formalized compensation ▪ Developed and articulate SAFETY University philosophy, pay grades, a dif
Slide 47: I-TEAM University: Our All-Encompassing Learning Platform
-TEAM University: Our All-Encompassing Learning Platform LEADING ORGANIZATIONS Extensive >47K LEADING TEAMS >46K ~33 on-the-job Total annual online Total annual Average hours training training hours for all in-person training of training annually for all team members team members in hours for leader
Slide 48: Signature Programs Reinforce Authenticity of Employee Value Proposition
Signature Programs Reinforce Authenticity of Employee Value Proposition WE’RE A PEOPLE WE GROW CAREERS WE MAKE A WE GIVE FIRST TEAM. FROM WITHIN. LOCAL IMPACT. BACK. ▪ World-Class Safety Culture ▪ -TEAM University ▪ Feedback Driven ▪ BFS Cares ▪ First Team Recognition ▪ Leadership Development Engage
Slide 49: Key Takeaways
Key Takeaways 1 2 3 Driving a clear and Empowering customers Building on our strong, differentiated ESG with industry-leading inclusive culture and strategy to outperform solutions to enable a values-driven approach today and transform sustainable future and to attract, retain, and tomorrow drive pr
Slide 50: Q&A
Q&A I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 50
Slide 51: Break
BREAK I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 51
Slide 52: Elevating Commercial Excellence
Elevating Commercial Excellence MIKE FARMER • President, Commercial Operations I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 52
Slide 53: Key Messages
Key Messages 1 Leveraging largest sales organization and offsite manufacturing network in industry to deepen customer relationships and drive long-term revenue growth 2 Improving data-driven sales process with continuous improvement mindset to elevate commercial excellence 3 Strengthening relationsh
Slide 54: Our Sales Organization is a Competitive Advantage
Our Sales Organization is a Competitive Advantage Key Stats Industry-Leading Sales Organization >13 years average tenure of our Outside Sales Team ~1,850 ~1,950 Solving Builder Pain Points by Leveraging Our OUTSIDE SALES INSIDE SALES REPRESENTATIVES REPRESENTATIVES Network of Value-Added Components
Slide 55: Commercial Excellence is Core to Long-Term Growth
Commercial Excellence is Core to Long-Term Growth Sales Ops Leading software enables greater customer visibility, system controls to reduce overrides, optimized market coverage Value-Based Selling Market Pricing Fully integrated sales force helps solve customer Mature pricing process, promoting pric
Slide 56: Building a Culture of Sales Excellence
Building a Culture of Sales Excellence Actions Benefits ▪ Leveraging largest Share gains, including customer data set in new customer wins, homebuilding industry ▪ Driving deeper understanding of Sales Value-Based Sales + Market Category increased wallet share, and stickiness Partner with customers
Slide 57: Taking Proactive Steps to Enhance Pricing and Returns
Taking Proactive Steps to Enhance Pricing and Returns Actions Benefits ▪ Driving pricing Improved gross consistency within margin profile with markets ▪ Using data to drive better relationships Sales Value-Based Sales + Market Category value-added mix National customer alignment with local Analytics
Slide 58: Strengthening National Builder Relationships to Grow with Our Partners
Strengthening National Builder Relationships to Grow with Our Partners National Builders Expanding Leading with Value- Demonstrating Resilience Relationships Added Solutions in Current Market Continuing to build our Providing customer-centric footprint and strengthen solutions that drive efficiency,
Slide 59: Commercial Excellence in Action
Commercial Excellence in Action SOLVING PAIN POINTS Customer Segment Value Proposition BFS BENEFITS FOR CUSTOMERS ▪ National – Leader in overall scale and offsite We are the easiest to do manufacturing across an aligned, nationwide footprint that matches to the builder need in our markets business w
Slide 60: Key Takeaways
Key Takeaways 1 2 3 Leveraging largest sales Improving data-driven Strengthening organization and offsite sales process with relationships with manufacturing network continuous improvement homebuilders to solidify in industry to deepen mindset to elevate industry leadership and customer relationship
Slide 61: Accelerating Industry-Leading Digital Offerings
Accelerating Industry- Leading Digital Offerings TIM PAGE • EVP, Digital Solutions I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 61
Slide 62: Key Messages
Key Messages 1 Significant progress on our digital journey, delivering on our commitments to customers and shareholders 2 Continued industry leadership, providing cutting-edge digital solutions with a relentless focus on customer success and value to empower the next generation of homebuilding 3 Str
Slide 63: Creating a Better Way to Build as Demand for Modern, Digital Solutions Continues to Grow
Creating a Better Way to Build as Demand for Modern, Digital Solutions Continues to Grow Addressing industry …with industry-leading …to become the premier partner pain points… digital solutions… for builders and suppliers ▪ Lengthy design cycle remains Streamlined design in a Increase Wallet Share
Slide 64: Digital Platform Expected to Fuel Long-Term Growth
Digital Platform Expected to Fuel Long-Term Growth Laid Out a Bold Plan at 2021 Investor Day… …and Continue to Set the Pace for the Industry KEY ACCOMPLISHMENTS FOREFRONT OF DIGITAL TRANSFORMATION ✓ Introduced myBLDR.com customer portal, hub for ✓ Industry leader; 3-5-year head start vs. competitors
Slide 65: Driving Value for Key Stakeholders Through Distinct Competitive Advantages
Driving Value for Key Stakeholders Through Distinct Competitive Advantages Value for Key Stakeholders Competitive Advantages HOMEBUYER Scale and market ~4K sales team position to reach with direct and Improved homebuying experience, design choices, understanding of a fragmented trusted homebuilder c
Slide 66: Three Pillars of Our Digital Strategy
Three Pillars of Our Digital Strategy Technology Adoption Growth Delivering digital Helping customers Extending market tools to transform accelerate their leadership to drive homebuilding digital journey revenue growth Increased Confidence to Achieve $1B in Incremental Revenue by 2026 I N V E S T O
Slide 67: Expanding Digital Solutions to Deliver End-to-End Capabilities
Expanding Digital Solutions to Deliver End-to-End Capabilities – Establishing New 3D Digital Channel Current Industry Model Future State: Our New 3D Digital Channel Semi-Automated 2D 3D Modeling Within Expansion to a Whole Estimating within a a “Shoppable Digital House Take-Off with Collaboration Pl
Slide 68: Digital Tools Solve Homebuilder Pain Points
Digital Tools Solve Homebuilder Pain Points Deploy Technologies that Create Significant Value 2D PLAN 3D DIGITAL TWIN for Homebuilders myBLDR HOME PLAN LIBRARY DRAFTING BUILD RENDER OPTIMIZE HOME Framing Truss MEPs CONFIGURE Offer Customers More Control Over Design, Saving Both Customers and Their C
Slide 69: Significant Progress on Our myBLDR.com Platform
Significant Progress on Our myBLDR.com Platform ▪ Access point for delivering our Digital Tools in a collaborative customer experience ▪ With continued development, we will connect a homebuilder’s processes within one platform ✓ Plan intake and mark-up ✓ Ability to make structural and finish selecti
Slide 70: Customer Testimonial Video
Customer Testimonial Video I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 70
Slide 71: Signs that Digital Adoption is Taking Hold
Signs that Digital Adoption is Taking Hold Adoption Drivers ~5K ~5K NEW PLANS ADDED UNIQUE USERS PER ▪ Expand adoption across leadership team myBLDR.com MONTH in myBLDR.com ▪ Track progress through area scorecards ▪ Host digital “roadshows” to raise awareness; ~25K invest in local markets AUTOMATED
Slide 72: Case Study | Early Technology Adoption
Case Study | Early Technology Adoption Construction Trade Front Light Building x BFS Digital Tools Outcomes Challenges ✓ Better quality ▪ Need to address where ✓ Cost efficiency trade tools were inconsistent with job ✓ Reduced cycle time requirements Home Configure Render Virtual Tour BIM Preview ✓
Slide 73: Growth: Monetizing Digital Assets to Increase Profitability
Growth: Monetizing Digital Assets to Increase Profitability Connecting the Dots… …to Deliver Exceptional Value ▪ Comprehensive customer Enhance Grow Expand Deliver solutions Existing Market Share Shoppable Fee-Based Customer with New Product Digital ▪ Industry-leading innovation Stickiness Customers
Slide 74: Interview with an Early Technology Adopter
Inter view with an Early Technology Adopter TIM PAGE • EVP, Digital Solutions MATT GREEN • President & CEO, Front Light Building I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 74
Slide 75: Key Takeaways
Key Takeaways 1 2 3 Significant progress on Continued industry Strong commitment our digital journey, leadership, providing to value creation, delivering on our cutting-edge digital achieving meaningful commitments to solutions with a relentless progress toward customers and focus on customer succes
Slide 76: Financial Excellence and Long-Term Targets
Financial Excellence and Long-Term Targets PETER JACKSON • Chief Financial Officer I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 76
Slide 77: Key Messages
Key Messages 1 Proven track record of execution and exceptional financial results 2 Continuous focus on margin expansion and robust cash flow generation 3 Fortress balance sheet fuels clear capital allocation priorities to compound value for all stakeholders 4 Well-positioned for profitable growth a
Slide 78: Strong Historical Financial Performance and Margin Growth
Strong Historical Financial Performance and Margin Growth Sales ($B) Adj. EBITDA1 ($B) 12% CAGR (2019-2023E) 37% CAGR (2019-2023E) $22.7 $19.9 7.7% 8.7% 11.2% 13.1% 13.5% $5.0 $4.4 $4.2 $17.0 $0.6 $3.1 $2.1 $12.8 $2.8 $10.9 $0.3 $1.3 $0.6 $17.7 $16.4 $15.7 $11.5 $12.5 $1.1 $0.8 $2.3 $2.2 $1.8 $0.9 $
Slide 79: Solid Progress Against Base Business Targets
Solid Progress Against Base Business Targets 2021-2025E Targets Progress to Date (Announced at Dec. 2021 Investor Day) (2021-2023E1) Revenue ($B) ~10% CAGR ~3% CAGR Adjusted EBITDA ($B) ~15% CAGR ~13% CAGR Adjusted EBITDA Margin (Annual Expansion) ~50 bps ~115 bps Adjusted EPS ~30% CAGR ~45% CAGR Co
Slide 80: Positioned to Outperform in All Market Scenarios
Positioned to Outperform in All Market Scenarios Optionality to Manage Across Environments BFS ADVANTAGES Weaker Economy Stronger Economy ✓ Manage fixed costs and overhead ✓ Accelerate digital and technology transformation Industry-Leading ✓ Right-size network and optimize capacity Scale across plan
Slide 81: Strong Cash Flow Generation and Disciplined Working Capital Management
Strong Cash Flow Generation and Disciplined Working Capital Management High Cash-Generating Substantial FCF ($B) & Adj. Net Income (%) Effective Capital Business $3.3 Allocation ▪ Low CapEx requirement: ▪ Strong FCF provides financial 1.5% to 2% of sales flexibility and multiple paths for capital de
Slide 82: Fortress Balance Sheet and Liquidity Provide Financial Resilience
Fortress Balance Sheet and Liquidity Provide Financial Resilience Weighted Average Debt Maturity Low Net Leverage Profile of ~7 Years1 ($B) 4.2x $2.0 $1.8 3.1x 5.3% 2.5x Avg. Rate (as of 11/21/23) 1.3x 1.3x 1.3x 1.4x $0.5 1.0x 0.8x 0.7x ~$0.2 2 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2017
Slide 83: Capital Allocation Continues to Drive Value Creation
Capital Allocation Continues to Drive Value Creation 2022-2023E1 Deployed: $6.1B Consistent Capital Allocation Priorities $0.8B 1. Maintain Strong Balance Sheet 2022-2025E ▪ Target Base Business leverage ratio $0.9B Deployable of 1.0x to 2.0x Capital Goal 2. Organic Growth ▪ Drive productivity and g
Slide 84: Clear and Strategic Approach to Tuck-in M&A
Clear and Strategic Approach to Tuck-in M&A FINANCIAL STRATEGIC FILTERS CRITERIA 1 Fit 2 Product 3 Size IRR > Cost ▪ Growth mindedness ▪ Value add / specialty ▪ Advance leadership of Capital (e.g., Components, position in desirable ▪ Cultural alignment Millwork, Install) geographies ▪ Key leaders al
Slide 85: Strong Track Record of Disciplined M&A Since 2021
Strong Track Record of Disciplined M&A Since 2021 DRIVING STRONG OPERATIONAL AND FINANCIAL BENEFITS ~45% ~51% Specialty Building Value- 20% 19% Value- Products & Services 6% Added Added 24% 24% Lumber & Lumber Key Impacts Product Q4 Product Growth in Sheet Goods Mix 2021 Mix 2023E ▪ Continue to leve
Slide 86: New 2026E Base Business Targets
New 2026E Base Business Targets NEW 2024E-2026E TARGETS KEY DRIVERS ▪ Low- to mid-single-digit market growth ▪ Grow top-line faster than market as Single-Family returns to 1.1M starts Revenue ~9% CAGR ▪ Digital ramp up and value-added products expansion ▪ Continued tuck-in M&A Adj. EBITDA ~12% CAGR
Slide 87: Base Business Net Sales Bridge
Base Business 1 Net Sales Bridge ($B) $1.2-$1.4 $21.2-$21.8 $2.0-$2.2 $1.6-$1.8 $16.4 >150 bps of Annual Above Market Growth ▪ Digital Investments ▪ Product Initiatives ▪ Additional Market Share Capture 2 ~9% Base Business Revenue CAGR Target from 2024E through 2026E 1 Estimate assumes $400/mbf lumb
Slide 88: Base Business Adjusted EBITDA Bridge
Base Business 1 Adjusted EBITDA Bridge ($M) $150-$200 $3,000-$3,200 $150-$200 $300-$350 $200-$250 $2,200 30-33% Long-term Normalized Gross Margins3 2 ~12% Base Business Adjusted EBITDA CAGR Target from 2024E through 2026E 1 Estimate assumes $400/mbf lumber & sheet good pricing. 2 2023 estimate as pr
Slide 89: Allocating Capital to its Highest and Best Use
Allocating Capital to its Highest and Best Use Organic Growth Tuck-in M&A Share Repurchases ~$3.0B-$6.0B Deployable ~$1.5B Capital1 of ~$1.0B $5.5B-$8.5B (2024E-2026E) Accelerate investments in Pursue tuck-in acquisitions to Ongoing and disciplined digital and value-added augment current capabilitie
Slide 90: Base Business Adjusted EPS Bridge
Base Business 1 Adjusted EPS Bridge $2.10-$2.20 $18.20-$18.60 $0.95-$1.00 $0.95-$1.00 $1.65-$1.75 $1.00-$1.10 $11.55 2 3 ~17% Base Business Adjusted EPS CAGR Target from 2024E through 2026E 1 Estimate assumes $400/mbf lumber & sheet good pricing. 2 2023 estimate as provided on Q3 2023 earnings call
Slide 91: Continue to Drive Long-Term Shareholder Value Creation
Continue to Drive Long-Term Shareholder Value Creation Sales CAGR Adj. EBITDA CAGR Adj. EBITDA Margin Adj. EBITDA Margin 2023E EV / Adj. EBITDA (2015 to 2023E) (2015 to 2023E) Expansion (2023E) vs. Peers4 (2015 to 2023E) 18.5% 16.5x 15.9% 39% 1,026 bps 26% 8.6x 7.7x 7.0% 15.7% 13.5% 10.8% 305 bps 8%
Slide 92: Key Takeaways
Key Takeaways 1 2 3 4 Proven track record Continuous focus on Fortress balance Well-positioned for of execution and margin expansion sheet fuels clear profitable growth exceptional and robust cash capital allocation as we continue to financial results flow generation priorities to lead the industry
Slide 93: Closing Remarks
Closing Remarks DAVE RUSH • President & Chief Executive Officer I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 93
Slide 94: Builders FirstSource Investment Thesis
Builders FirstSource Investment Thesis 1 Creating opportunity by addressing builder 3 Leveraging robust FCF generation problems and delivering value-added from resilient business model and broad products and solutions across cycles; strong product portfolio to fuel disciplined track record and exper
Slide 95: Q&A
Q&A I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 95
Slide 96: Appendix: Non-GAAP Reconciliations
APPENDIX Non-GAAP Reconciliations I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 96
Slide 97: Non-GAAP to GAAP Reconciliation Tables
Non-GAAP to GAAP Reconciliation Tables BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES Reconciliation of Adjusted Non-GAAP Financial Measures to their GAAP Equivalents (unaudited) Fiscal Year Nine Months Ended (Pro Forma) (Pro Forma) September 30, (in millions) 2019 2020 2021 2022 2023 Reconciliation to
Slide 98: Speaker Bios
SPEAKER BIOS I N V E S T O R D A Y 2 0 2 3 – © B U I L D E R S F I R S T S O U R C E 98
Slide 99: Speaker Bios
Speaker Bios DAVE RUSH • Chief Executive Officer Dave Rush is the chief executive officer of Builders FirstSource. Prior to his appointment, Mr. Rush served as executive vice president of the Strategic Management Office (SMO). In this role, he was responsible for developing processes to prioritize,
Slide 100: Speaker Bios
Speaker Bios PETER JACKSON • Chief Financial Officer Peter Jackson is chief financial officer of Builders FirstSource. He is responsible for accounting and controls, financial planning and analysis, investor relations, treasury, tax, mergers & acquisitions, and information technology. Prior to the m
Slide 101: Speaker Bios
Speaker Bios STEVE HERRON • Chief Operating Officer Steve Herron is chief operating officer of Builders FirstSource. He is responsible for overseeing the performance and day-to-day operational and administrative functions of the company. Prior to this appointment, Mr. Herron served as president of B
Slide 102: Speaker Bios
Speaker Bios TIM JOHNSON • EVP, Legal, Safety, and ESG Tim Johnson is executive vice president, general counsel, and corporate secretary of Builders FirstSource. He is responsible for legal, compliance, ethics, corporate governance, mergers and acquisitions, real estate, intellectual property, litig
Slide 103: Speaker Bios
Speaker Bios AMY BASS MESSERSMITH • Chief People Officer Amy Bass Messersmith is chief people officer of Builders FirstSource. She is responsible for collaborating with the executive team, senior management, and field leadership to ensure human resources works to meet the needs of our people and our
Slide 104: Speaker Bios
Speaker Bios MIKE FARMER • President, Commercial Operations Mike Farmer is president of commercial operations at Builders FirstSource. He leads the company’s commercial efforts, including sales and national accounts, marketing, customer segment strategy, and innovation. In this role, Mr. Farmer is r
Slide 105: Speaker Bios
Speaker Bios TIM PAGE • EVP, Digital Solutions Tim Page is executive vice president of digital solutions at Builders FirstSource. He is responsible for accelerating the company’s digital journey and business results through developing technologies that create customer value and drive efficiency in r
Slide 106: Speaker Bios
Speaker Bios HEATHER KOS • SVP, Investor Relations Heather Kos is senior vice president of investor relations for Builders FirstSource. She is responsible for broadening the reach of Builders FirstSource with investors and analysts to ensure they understand the value it holds, while working to attra