Stella-jones Inc. · TSX:SJ
Stella-jones — Shareholder Meeting (May 2022)
32 slides from Stella-jones's shareholder meeting presentation, May 11, 2022
Slide 1: 2022 Annual Meeting of Shareholders
2022 M a y 11 ANNUAL MEETING OF SHAREHOLDERS
Slide 2: Agenda
AGENDA 1 Opening of the Meeting Chair, Secretary and Scrutineers Notice of Meeting Scrutineer’s Report Voting Minutes of Previous Meeting Annual Report & Independent Auditor’s Report Election of the Directors Appointment of Auditors Advisory Vote on the Corporation’s Approach to Executive Compensati
Slide 3: Management
MANAGEMENT Éric Vachon, CPA, CA Silvana Travaglini, CPA, CA Marla Eichenbaum President and Senior Vice-President and Vice-President, General Chief Executive Officer Chief Financial Officer Counsel and Secretary 3
Slide 4: Caution Regarding Forward-Looking Information
C A U T I O N R E G A R D I N G F O RWA R D - L O O K I N G I N F O R M AT I O N This presentation contains certain statements that are forward-looking, including comments with respect to the Company's objectives, strategies, targets and expectations. The reader is cautioned not to place undue relia
Slide 5: Katherine A. Lehman, Chair of the Board
Katherine A. Lehman Chair of the Board 5
Slide 6: Enhancing Our Sound Governance
ENHANCING OUR SOUND GOVERNANCE KEY HIGHLIGHTS OF THE YEAR • Published 3rd ESG report, overseen by the EH&S Committee • Expanded Audit Committee scope to include cybersecurity oversight • Addition of Board skills matrix to Management Proxy Circular • Established 30% Board gender diversity target BOAR
Slide 7: Agenda
AGENDA Opening of the Meeting 2 Chair, Secretary and Scrutineers 3 Notice of Meeting 4 Scrutineer’s Report 5 Voting 6 Minutes of Previous Meeting 7 Annual Report & Independent Auditor’s Report 8 Election of the Directors Appointment of Auditors Advisory Vote on the Corporation’s Approach to Executiv
Slide 8: Election of Directors
E L E C T I O N O F D I R E C TO R S Robert Coallier Anne E. Giardini Rhodri J. Harries Karen Laflamme Katherine A. Lehman Corporate Director Corporate Director Executive Vice-President and Corporate Director Chair of the Board, Chief Financial and Stella-Jones Inc. Administration Officer, Partner,
Slide 9: Agenda
AGENDA Opening of the Meeting Chair, Secretary and Scrutineers Notice of Meeting Scrutineer’s Report Voting Minutes of Previous Meeting Annual Report & Independent Auditor’s Report Election of the Directors 9 Appointment of Auditors 10 Advisory Vote on the Corporation’s Approach to Executive Compens
Slide 10: Éric Vachon, President and CEO
Éric Vachon President and Chief Executive Officer 9
Slide 11: Introduction
INTRODUCTION As an essential business, Stella-Jones has continued to operate, deliver and thrive through the challenging circumstances of the last two years. Our 2,400 dedicated employees and ongoing commitment to a culture of safety and agility made this possible. 10
Slide 12: Building on Our Strong Fundamentals
B U I L D I N G O N O U R S T R O N G F U N D A M E N TA L S UTILITY R A I L W AY RESIDENTIAL POLES TIES LUMBER Supplies all the continent’s major Supplies North America’s Class 1, Manufactures and distributes electrical utilities and short line and commercial premium residential lumber and telecomm
Slide 13: 2021 – Record Performance
2021 – RECORD PERFORMANCE $2.75 billion $400 million $227 million $251 million Sales EBITDA(1) Net Income Cash Flow from Operations • Stellar team • Strength in fibre sourcing • Unparalleled customer service • Strong fundamentals of our business (1)This is a non-GAAP financial measure which does not
Slide 14: Product Category Overview & 2022-2024 Outlook
P R O D U C T C AT E G O RY O V E R V I E W & 2022-2024 OUTLOOK UTILITY RAILWAY RESIDENTIAL POLES TIES LUMBER • Supported customers with transition to an • Strong procurement network provided a • Navigated through the market price alternative preservative solution and fire- steady raw material inflo
Slide 15: 2022-2024 Outlook – Evolving Product Sales
2 0 2 2 - 2 0 2 4 O U T L O O K – E V O LV I N G P R O D U C T S A L E S ~2%-5% 8% 6% ~20%-25% 5% 26% 28% 22% Infrastructure-related sales are ~75%-80% expected to represent 75-80% 73% 68% 64% of total sales by 2024. 2019 Pre-Pandemic 2020 2021 …............ 2024 Projected Utility Poles, Railway Tie
Slide 16: Growth by Acquisition
GROWTH BY ACQUISITION • Lufkin Creosoting Co. and 440 Investments Wood treating [“Kisatchie”] (U.S.) Wood utility facilities of • Bois KMS and Guelph Webster Wood pole business Tangent Rail McFarland Boatright Northern Pressure Wood Products Cahaba Pressure Utility Pole Preserving of J.H. Baxter Cor
Slide 17: Investing and Innovating in Our Network
I N V E S T I N G A N D I N N O VAT I N G I N O U R N E T W O R K IMPROVEMENTS INCLUDE: • Capex Program Expanded - Incremental $90M to $100M over 3 years to support Utility Poles growth • Equipment Upgrades Underway • New Procurement Sites – Continually being assessed • DCOI Preservative to Replace
Slide 18: Returning Capital to Shareholders
R E T U R N I N G C A P I TA L TO S H A R E H O L D E R S +50% 2019- 2021 2022-2024 The Company expects to return Projected approximately $500 to $600 million to shareholders in the 2022-2024 period. $365M $500M-$600M cumulative cumulative Please refer to the Company’s MD&A for a complete list of as
Slide 19: Prioritizing the Integration of ESG
P R I O R I T I Z I N G T H E I N T E G R AT I O N O F E S G To reduce the environmental Contribute to sustainable forest impact of our operations by management and climate change improving the use and management mitigation through carbon of natural resources, maximizing sequestration in our product
Slide 20: Silvana Travaglini, CPA, CA, SVP and CFO
Silvana Travaglini, CPA, CA Senior Vice-President and Chief Financial Officer 19
Slide 21: 2021 – Record Results
2 0 2 1 – R E C O R D R E S U LT S Sales EBITDA(1) & Operating Income Net Income (in millions of $) (in millions of $) (in millions of $) $2,750 $400 $227 $2,551 $385 $210 +13% $326 Organic $309 Growth 15.1% $3.49 14.5% $3.12 2020 2021 2020 2021 2020 2021 EBITDA Operating Income (1)This is a non-GAA
Slide 22: 2021 – Strong Cash Flow & Disciplined Capital Allocation
2 0 2 1 – S T R O N G C A S H F L O W & D I S C I P L I N E D C A P I TA L A L L O C AT I O N CFO before certain items (1) & CFO Capital Allocation Dividends (in millions of $) (in millions of $) (in millions of $) $348 $402 $388 $64 $47 $40 $47 $251 $155 $155 $108 $0.72 $178 $55 $0.60 $40 $129 $60
Slide 23: 2021 – Maintaining a Solid Financial Position
2 0 2 1 – M A I N TA I N I N G A S O L I D F I N A N C I A L P O S I T I O N Net Debt(1) Net Debt-to-EBITDA(1) Available Liquidity (in millions of $) (Leverage ratio) (in millions of $) $878 2.2x $329 $745 1.9x $190 2020 2021 2020 2021 2020 2021 (1)These are non-GAAP and other financial measures whi
Slide 24: 10-Year Track Record – Results
1 0 - Y E A R T R A C K R E C O R D - R E S U LT S Sales(1) EBITDA(2)(3) Net Income (in millions of $) (in millions of $) (in millions of $) $2,750M $227M CAGR CAGR CAGR $400M 14.3% 13.4% 15.8% $732M $120M $73M 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019
Slide 25: 10-Year Track Record – CFO & Cash Deployment
10-YEAR TRACK RECORD – CFO & CASH DEPLOYMENT CFO before certain items(1) Capital Allocation Dividends (in millions of $) (in millions of $) (in $ per share) $0.72 $348M CAGR $388M CAGR 18.2% 13.8% $192M $121M $0.16 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018
Slide 26: Q1-2022 Financial Results
Q1-2022 FINANCIAL RESULTS Stella-JoneS a
Slide 27: Q1-22 – Results
Q 1 - 2 2 – R E S U LT S Sales EBITDA(1) & Operating Income Net Income (in millions of $) (in millions of $) (in millions of $) $623 $651 $99 $88 $56 $82 $46 $67 15.9% 13.5% $0.85 $0.73 Q1-21 Q1-22 Q1-21 Q1-22 Q1-21 Q1-22 EBITDA Operating Income (1) This is a non-GAAP financial measure which does no
Slide 28: Q1-22 – Cash Flow and Capital Allocation
Q 1 - 2 2 – C A S H F L O W A N D C A P I TA L A L L O C AT I O N CFO before certain items(1) Capital Allocation Dividends (in millions of $) (in millions of $) (in $ per share) $61 $100 $51 $0.80(2) $88 $0.72 $39 $37 $22 $14 Q1-21 Q1-22 Q1-21 Q1-22 2021 2022 Capex Share Repurchases (1) Before chang
Slide 29: Éric Vachon, President and CEO
Éric Vachon President and Chief Executive Officer 28
Slide 30: Agenda
AGENDA Opening of the Meeting Chair, Secretary and Scrutineers Notice of Meeting Scrutineer’s Report Voting Minutes of Previous Meeting Annual Report & Independent Auditor’s Report Election of the Directors Appointment of Auditors Advisory Vote on the Corporation’s Approach to Executive Compensation
Slide 31: Stella-Jones
Stella-JoneS a—<—-
Slide 32: 2022 Annual Meeting of Shareholders
2022 M a y 11 ANNUAL MEETING OF SHAREHOLDERS