Builders Firstsource, Inc. · NYSE:BLDR
Builders Firstsource — Investor Presentation (February 2025)
46 slides from Builders Firstsource's investor presentation, February 2025
Slide 1: Corporate Presentation
OUTPERFORM TODAY. TRANSFORM TOMORROW. Corporate Presentation February 2025
Slide 2: Safe Harbor and Non-GAAP Financial Measures
Safe Harbor and Non-GAAP Financial Measures Cautionary Notice Statements in this presentation 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 statements about anticip
Slide 3: Why Invest With BFS
Why Invest With BFS Industry Leader. Differentiated position in fragmented market with growing portfolio of value-added services across diverse geographies and end markets nationwide Builders FirstSource is Focusing on Innovation. Investing in value-added solutions and the largest U.S. supplier tech
Slide 4: Builders FirstSource Snapshot (NYSE: BLDR)
Builders FirstSource Snapshot (NYSE: BLDR) KEY STATS NATIONAL REACH. LOCAL EXPERTISE. Irving, TX ~$16.5B ~29K $16.4B $2.3B $1.5B Headquarters Market Cap1 Employees Net Sales Adj. EBITDA2 FCF2 ~50% Value-Added Product Mix 18% 24% 25% Product 2024 Net Sales 11% End Category Breakdown Market 71% 26% 25
Slide 5: Builders FirstSource – What We Do
Builders FirstSource – What We Do Trusses Spec Siding, Exterior Trim, & Other Products ialt yB ts uil duc di ng ro P Professional Install, Design Pr d Wall Panels 25% 24% od re Assistance, & Other Services ctu uc ts/S ufa Man ervic Engineered Wood Digital Solutions 50% es Value-Added s Interior and
Slide 6: Advantages of Manufactured Products
Advantages of Manufactured Products Why Frame with Components? Manufactured Products Benefits of Framing ▪ Computerized designs with Components vs. ▪ Floor and Roof Trusses Better reduce mistakes and Traditional Stick Framing optimize material usage, ▪ Wall Panels leading to lower costs ~223.4 ▪ Eng
Slide 7: Company History – Respect the Past, Embrace the Future
Company History – Respect the Past, Embrace the Future Builders FirstSource BFS and BMC Acquired WTS Added to S&P 500, Successfully acquired ProBuild, merge, creating nation’s Paradigm, a software a significant Builders’ Supply navigated creating a national premier supplier of building solutions and
Slide 8: We Continue to Transform the Homebuilding Industry
We Continue to Transform the Homebuilding Industry Key Accomplishments Since the 2021 Merger ▪ Delivered organic sales growth and margin expansion Continued Leadership Focus ▪ Drove strong M&A execution and track record ▪ Exceptional leadership team with an average of ▪ Accelerated digital transform
Slide 9: Well-Positioned for Above-Market Growth in the Future
Well-Positioned for Above-Market Growth in the Future $16.4B BLDR 2024 Revenue1 Total Addressable Market ( % BLDR Share) Positive Momentum and Clear Path Toward Additional Gains Driven by Growing share with 1 ~11% existing customers ~1% ~$110B ~$140B ~2% 2 Expanding product offerings Single-Family2
Slide 10: Long-Term Housing Tailwinds Remain Intact
Long-Term Housing Tailwinds Remain Intact Housing Starts (000s) Housing Starts YoY Growth in Households (000s) Cumulative Underbuilt Homes Underlying fundamentals for demand support 4,000 continued housing growth 3,500 2,550 3,000 Underbuilt by ~1.7M – 3.7M 2,150 2,500 Homes Since 2010 1,750 20-year
Slide 11: 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, 91 o
Slide 12: Our -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 annual efficiencies th
Slide 13: Clear Strategic Pillars Driving Long-Term Profitable Growth
Clear Strategic Pillars Driving Long-Term Profitable Growth Organic Growth with a Drive Continue to Disciplined Focus on Operational Build Our High- Capital Value-Added Excellence & Performing Allocation Products and Invest in Digital Culture Services and Innovation Continuing to Compound Value Crea
Slide 14: 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 15: Capturing Significant Growth Opportunity in Install Operations
Capturing Significant Growth Opportunity in Install Operations ~$2.7B 2024 Install Sales (~16% 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 16: 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 17: Delivering Productivity through Targeted Initiatives
Delivering Productivity through Targeted Initiatives ACHIEVEMENTS Near-Term Efficiency Focus ▪ Productivity: $415M1 of total productivity savings ▪ Improve fleet utilization with improvement over the last three years related to operational in truck turnaround times excellence and supply chain initia
Slide 18: Our Sales Organization is a Competitive Advantage
Our Sales Organization is a Competitive Advantage Key Stats1 Industry-Leading Sales Organization >13 years average tenure of our Outside Sales Team ~2,600 ~2,600 Solving Builder Pain Points by Leveraging Our OUTSIDE SALES INSIDE SALES REPRESENTATIVES REPRESENTATIVES Network of Value-Added Components
Slide 19: 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 builder needs in our markets business with gi
Slide 20: 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 21: Digital Is Driving Value for Key Stakeholders Through Distinct Competitive Advantages
Digital Is Driving Value for Key Stakeholders Through Distinct Competitive Advantages Value for Key Stakeholders Competitive Advantages HOMEBUYER Scale and market >5K sales team position to reach members Improved homebuying experience, design choices, understanding of a fragmented with direct and co
Slide 22: 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 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 Platform – Twin
Slide 23: Creating a Better Way to Build as Demand for Digital Solutions Grows
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 24: BFS Digital Platform: Customer Case Studies
BFS Digital Platfor m: Customer Case Studies REGIONAL PRODUCTION BUILDER REGIONAL CUSTOM BUILDER NATIONAL SPEC BUILDER HIGH-END CUSTOM BUILDER $400K - $900K / HOME $350K - $1M / HOME $200K - $600K / HOME $1M - $5M / HOME 1,200 STARTS / YEAR 200 STARTS / YEAR 6,500 STARTS / YEAR 40 STARTS / YEAR OPER
Slide 25: Our Corporate Social Responsibility Journey
Our Corporate Social Responsibility Journey 2022 2023 2024 & BEYOND • Published inaugural Corporate • Published second annual • Installed safety cameras in over • Launched formal Corporate Social Responsibility Report Corporate Social 95% of all heavy- and Social Responsibility strategy • Developed
Slide 26: Delivering Value Through Corporate Social Responsibility
Delivering Value Through Corporate Social Responsibility Key Accomplishments ✓ Released latest CSR report in May 2024 ✓ ~30% RIR1 reduction across the company in 2023 Customers Team Members Operations Communities ✓ >60% of all facilities were accident-free in 2023 Providing Innovative Fostering a Wo
Slide 27: Financial Performance Key Messages
Financial Performance Key Messages 1 Proven track record of execution and exceptional financial results 2 Driving double-digit Adj. EBITDA margins and generating robust cash flow over the cycle 3 Fortress balance sheet fuels clear capital allocation priorities to compound value for all stakeholders
Slide 28: Strong Historical Financial Performance
Strong Historical Financial Performance Sales ($B) ~7% Base Business2 CAGR (2020-2024) $22.7 $19.9 $5.0 $17.1 $16.4 $4.2 $0.6 $12.8 $0.3 $17.7 $16.5 $16.4 $15.7 $12.5 2020PF 2021 2022 2023 2024 SF Starts 991 1,127 1,005 948 1,012 Base Business Single-Family Housing Starts (000s)1 Commodity <>$400/mb
Slide 29: Strong Historical Financial Performance and Margin Growth
Strong Historical Financial Performance and Margin Growth Adjusted EBITDA1 ($B) ~20% Base Business2 CAGR (2020-2024) Driving Double-Digit Adj. EBITDA Margins Through the Cycle 8.7% 11.2% 13.1% 14.0% 14.2% ✓ Transformational merger with $4.4 BMC in 2021 and ~$2.6B in tuck-in acquisitions since BMC $3
Slide 30: Strategic Execution Has Driven Sustainable Gross Margin Improvement
Strategic Execution Has Driven Sustainable Gross Margin Improvement Strategic Initiatives Lead to Higher Gross Margins ~45-55 bps ✓ Investment in Value- Added Products: VAP ~200-220 bps made up ~50% of net sales in 2024 vs. ~42% in 2019 ~180-200 bps ✓ Operational Excellence: ~$360M in COGS 31.0% ~31
Slide 31: Positioned to Outperform in All Market Scenarios
Positioned to Outperform in All Market Scenarios Optionality to Manage Across Environments BFS ADVANTAGES Weaker Economy Stronger Economy ✓ Manage fixed costs and overhead ✓ Accelerate digital and technology transformation Industry-Leading ✓ Right-size network and optimize capacity Scale across plan
Slide 32: Strong Cash Flow Generation Over the Cycle and Disciplined Working Capital Management
Strong Cash Flow Generation Over the Cycle and Disciplined Working Capital Management High Cash-Generating Substantial FCF ($B) & Cash Conversion (%) Effective Capital Business $3.3 Allocation ▪ Strong FCF provides ▪ Low Maintenance CapEx financial flexibility and requirement: ~1.5% to ~2% multiple
Slide 33: Fortress Balance Sheet and Liquidity Provide Financial Resilience
Fortress Balance Sheet and Liquidity Provide Financial Resilience Weighted Average Debt Maturity Low Net Leverage4 Profile of ~7 Years1 ($B) 4.2x $2.0 $1.8 3.1x ~5.4% 2.5x Avg. Rate2 $1.0 1.4x 1.5x 1.3x 1.3x 1.3x $0.6 1.5x 1.0x 1.1x 0.7x 2017 2018 2019PF 2020PF 2021 2022 2023 2024 2024 2025 2026 202
Slide 34: Disciplined Capital Deployment Framework
Disciplined Capital Deployment Framework ~$2.2B FY 2024 Highlights $367M $1.5B deployed to repurchase common shares $352M $352M deployed on 13 acquisitions to expand our footprint into high-growth $1.5B geographies and enhance our value-added offerings $367M allocated to sustaining the business, as
Slide 35: 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 36: Strong Track Record of Disciplined M&A
Strong Track Record of Disciplined M&A DRIVING STRONG OPERATIONAL AND FINANCIAL BENEFITS 500 bps ~45% ~50% Key Impacts Value- Value- Growth in 19% Value-Added Added Product Mix 25% Added 24% 25% ▪ Continue to leverage M&A Product Mix Product Mix as an accelerator of our Q4 2021 2024 growth strategy
Slide 37: Continue to Drive Long-Term Shareholder Value Creation
Continue to Drive Long-Term Shareholder Value Creation Sales CAGR Adj. EBITDA CAGR EPS CAGR Adj. EBITDA Margin FCF Yield P/E EV / Adj. EBITDA (2015 to 2023) (2015 to 2023) (2015 to 2023) (2023) (2023) (2024) (2024) 55.3% 17.0% 8.5% 27.7x 18.7x 35.6% 8.2% 21.7% 21.1% 15.8% 32.1% 16.9% 24.8% 11.3% 16.
Slide 38: Builders FirstSource Investment Thesis
Builders FirstSource Investment Thesis 1 Creating opportunity by 3 Leveraging robust FCF addressing builder problems generation from resilient and delivering value-added business model and broad products and solutions across product portfolio to fuel cycles; strong track record and disciplined capit
Slide 39: Appendix
Builders FirstSource APPENDIX
Slide 40: 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 41: Experienced Leadership Team Focused on Execution
Experienced Leadership Team Focused on Execution Peter Jackson Pete Beckmann Steve Herron Mike Hiller Tim Johnson Tim Page Chief Executive Chief Financial Chief Operating Chief Talent Officer EVP, Legal, Safety, EVP, Digital Officer Officer Officer and ESG Solutions Paul Vaughn Scott Robins Mike McC
Slide 42: Experienced and Diversified Board of Directors
Experienced and Diversified Board of Directors Skills Matrix Business Development / M&A 85% Finance 77% Public Company Director 77% Paul Levy Cheryl Ainoa Mark Alexander Cory Boydston Dirkson Charles Cleveland Director & Former EVP & Founder, Chairman, Former CFO, Founder and CEO, Christophe Chairma
Slide 43: Non-GAAP to GAAP Reconciliation Tables
Non-GAAP to GAAP Reconciliation Tables BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES Reconciliation of GAAP Net Income to Adjusted EBITDA (unaudited) Fiscal Year (Pro Forma) (in millions) 2020 2021 2022 2023 2024 Reconciliation to Adjusted EBITDA: GAAP net income $ 484.8 $ 1,725.4 $ 2,749.4 $ 1,540.6
Slide 44: Non-GAAP to GAAP Reconciliation Tables
Non-GAAP to GAAP Reconciliation Tables BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES Free Cash Flow (unaudited) Fiscal Year (Pro Forma) (in millions) 2020 2021 2022 2023 2024 Free Cash Flow Operating activities $ 467.5 $ 1,743.5 $ 3,599.2 $ 2,306.9 $ 1,872.7 Less: Capital expenditures, net of proceeds
Slide 45: Non-GAAP to GAAP Reconciliation Tables
Non-GAAP to GAAP Reconciliation Tables BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES Reconciliation of GAAP Net Income to Adjusted Net Income (unaudited) Fiscal Year (Pro Forma) (in millions) 2020 2021 2022 2023 2024 Reconciliation to Adjusted Net Income: GAAP net income $ 484.8 $ 1,725.4 $ 2,749.4 $
Slide 46: Non-GAAP to GAAP Reconciliation Tables
Non-GAAP to GAAP Reconciliation Tables BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES Reconciliation of GAAP Selling, General & Adminstrative Expense to to Adjusted Selling, General & Adminstrative Expense (unaudited) Fiscal Year (Pro Forma) (in millions) 2020 2021 2022 2023 2024 Reconciliation to Adju
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