Ufp Industries, Inc. · NASDAQ:UFPI
Ufp Industries — Investor Presentation (February 2022)
53 slides from Ufp Industries's investor presentation, Feb 28, 2022
Slide 1: 2022 Investor Relations Presentation
2022. Investor Relations Presentation @) UFP\\NDUSTRIES
Slide 2: Forward-looking statements
a 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, estimat
Slide 3: Companies of UFP Industries: wood and wood-alternative producers
With 216 locations in 8 countries, the companies of UFP Industries comprise one of the world’s largest producers of wood and wood-alternative products for retail, construction and industrial markets. NO MISSION STATEMENTS. JUST PEOPLE ON A MISSION.™ @) urp inoustRIes ay andl
Slide 4: Our Performance
$ sales in Millions Unitsates © rowan rate © rowi rate BUSINESS MODEL OUR PERFORMANCE ] i Adjusted EBITDA | Adjusted EBITDA Margin Net Earnings (ACI) 7.2% 84% 9.7% $317 $431 $835 | | $180 $247 $536 0% 32.2% | | $4416 $5,154 $8,636 0.0 0.0 Non-GAAP Financial Information: Please click here for reconci
Slide 5: Introduction: Who We Are
INTRODUCTION WHO WE ARE 1955 Company founded in Grand Rapids, MI 216 Number of facilities worldwide + Les ured $8.6B $835M Number of employees 2021 Revenue 2021 Adjusted worldwide EBITDA Please go here for the UFP Industries 2022 ESG Disclosure. 2022 @ Non-GAAP Financial Information: Please click he
Slide 6: Global Locations
216 GLOBAL LOCATIONS INTRODUCTION WHERE WE ARE
Slide 7: Our Customers
Based on 2021 Sales INTRODUCTION OUR CUSTOMERS Retail - $3.4B Big box, independents, & buying co-ops Construction - $2.7B Single and multi-family builders, commercial builders, concrete formers, factory-built housing (mobile & modular homes) & RVs Industrial - $2.1B Industrial packaging, packaging m
Slide 8: Business Segments
UFP INDUSTRIES BUSINESS SEGMENTS UFP INDUSTRIAL
Slide 9: Retail Solutions
BUSINESS SEGMENTS RETAIL SOLUTIONS | UFP RETAIL SOLUTIONS Dec orators: We manufacture and sell on-trend brands to all major 3 . building products retailers, while supporting our pro'wood . NEVER SETTLE. customers with best-in-class in-store and e-commerce support. handprint 2021: ProWood - $1,350M,
Slide 10: Retail Solutions: Deckorators
BUSINESS SEGMENTS RETAIL SOLUTIONS 1 The industry's leading innovator of composite Go Beyond Ordinary decking, railing and accessories. Deckorators.com 2022
Slide 11: Retail Solutions: ProWood
pro'wood NEVER SETTLE. BUSINESS SEGMENTS RETAIL SOLUTIONS Preserved lumber including timbers, decking, construction materials and fire-treated. ProWoodLumber.com
Slide 12: Retail Solutions: UFP Edge
BUSINESS SEGMENTS RETAIL SOLUTIONS UFP Ee DG E Premium siding, pattern, trim and accent wall products. Designed To Be Seen UFPEdge.com 2022
Slide 13: Retail Solutions: Outdoor Essentials
BUSINESS SEGMENTS RETAIL SOLUTIONS N 7 OUTDOOR Outdoor lifestyle products including wood and vinyl fencing, landscape OSS IS and garden décor, picnic tables, pergolas, trellises and more. QutdooréssentialProducts.com
Slide 14: Retail Solutions: Handprint
BUSINESS SEGMENTS RETAIL SOLUTIONS hand vint Wood components and ready-to-make products for a variety p Kt of inspired home décor and craft projects. aw Z - Coming soon: Handprintmade.com
Slide 15: Retail Solutions: E-Commerce
BUSINESS SEGMENTS RETAIL SOLUTIONS E-COMMERCE 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
Slide 16: Construction
BUSINESS SEGMENTS CONSTRUCTION 2021: Site Built - $1.2, Factory Built - $1.18, Commercial - $259M, Concrete Forming - $150M
Slide 17: Construction: Site Built
BUSINESS SEGMENTS CONSTRUCTION Roof trusses, wall panels, floor systems, doors and framing Ss ITE BUILT services for residential and light commercial builders. UFPConstruction.com 2022
Slide 18: Construction: Factory Built
FACTORY BUILT BUSINESS SEGMENTS CONSTRUCTION Roof trusses, floor joists, laminated wall panels, cabinet components, countertops and milled components for the modular and manufactured home, RV and mobile office.
Slide 19: Construction: Concrete Forming
CONCRETE FORMING BUSINESS SEGMENTS CONSTRUCTION Custom radius forms, wall and column forms, gang systems, lumber and panels.
Slide 20: Construction: Commercial
COMMERCIAL BUSINESS SEGMENTS CONSTRUCTION Full-service, turnkey project management of consumer environment and architectural interiors: Design, development, engineering, manufacturing, assembly, distribution and installation. IDXCorporation.com
Slide 21: Industrial
BUSINESS SEGMENTS INDUSTRIAL UFP INDUSTRIAL Focus Areas: [AUFP INDUSTRIES COMPANY + INDUSTRIAL PACKAGING Delivering innovative structural packaging solutions backed by the industry's leading design team, a global manufacturing footprint, and integrated hyper- responsive service teams. + PACKAGING MA
Slide 22: Industrial Packaging
BUSINESS SEGMENTS INDUSTRIAL IN DUSTRIAL Wood, steel and mixed material crates and specialty containers, hard cases, tracking technology, logistics solutions PACKAGING and onsite packaging services.
Slide 23: Packaging Materials
BUSINESS SEGMENTS INDUSTRIAL PACKAG IN G Solutions for manufacturing, energy, technology, agriculture and transportation. Stretch wrap, corrugated and boxboard, facility supplies MATERIALS and safety products, labels and tags, printers, hardware and software solutions
Slide 24: Manufactured Components
BUSINESS SEGMENTS INDUSTRIAL MANUFACTURED Precision-milled hardwoods, softwoods, composites and panel goods for bed foundations; cabinet components; shed, door and COMPONENTS window companies. Laminated panels for a variety of industries.
Slide 25: International
BUSINESS SEGMENTS INTERNATIONAL UFP International sources and sells products in 65 countries, extending our reach with multinational customers, while opening global UFP INTERNATIONAL opportunities for growth. Additionally, we own manufacturing assets in Canada, Mexico, Australia and Italy.
Slide 26: Model: Acquisitions
BUSINESS MODEL ACQUISITIONS PURPOSE Find new products and services to speed our transformation from commodity sales to value-added selling solutions and brands. GOAL Achieve scale and synergy targets to optimize growth, margins and returns.
Slide 27: 2021 Acquisitions: PalletOne and Sunbelt
BUSINESS MODEL 2021 ACQUISITIONS SCAL JANUARY £PalletOne Mhesvce FOREST PRODUCTS 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 specialize
Slide 28: 2021 Acquisitions: Gilmores and Walnut Hollow
BUSINESS MODEL 2021 ACQUISITIONS MARCH GILMORES Gilmores, Pty Ltd Gilmores adds a wide portfolio of consumable packaging to certain industrial packaging products and expands UFP Industrials ase throughout Australia, Founded in 1988 and om its distribution facility in Port Melbourne, Australia Gilmor
Slide 29: 2021 Acquisitions: Spartanburg and Endurable
BUSINESS MODEL 2021 ACQUISITIONS 7 N == Srr =a Innovation & Performance SPARTANBURG FOREST PRODUCTS 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
Slide 30: 2021 Acquisitions: Shelter Products and Boxpack
BUSINESS MODEL 2021 ACQUISITIONS PRODUCTS, INC. 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 it tory-Built business segment, 2020
Slide 31: 2021 Acquisitions: Ficus Pax and Advantage Label
BUSINESS MODEL 2021 ACQUISITIONS NOVEMBER ® FICUS PAX 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 th
Slide 32: Product Mix Evolution: Value-Added Share of Sales
BUSINESS MODEL PRODUCT MIX EVOLUTION Value-added as a percent of sales 69% 64% R 58% sor 42% 40% 36% Commodity Valueadded | Commodity Value-added | Commodity Value-added | commodity Value-added 2013 2019 2020 2021 Note: Lumber price appreciation more significantly impacts commodity-based products co
Slide 33: Product Mix Evolution: New Products
BUSINESS MODEL PRODUCT MIX EVOLUTION New Products $540m| '$426m| 10% 10% Sales %ofSales) Sales %ofSales| Sales % of Sales 2013 2019 2020 $842m| 10% Sales _% of Sales 2021
Slide 34: How We Got Here
BUSINESS MODEL HOW WE GOT HERE Founded in 1955. 2020 management realignment from geographic to business segment. Management team has an average tenure of 22 years. Managers are required International in scope, to own stock. regional in focus. Greater customer alignment, quicker to market, more effec
Slide 35: What Gets in Our Way
BUSINESS MODEL WHAT GETS IN OUR WAY General economic trends Fluctuation in commodity lumber costs Availability of quality labor and equipment Regulatory burdens
Slide 36: Long-Term Financial Goals
BUSINESS MODEL LONG-TERM FINANCIAL GOALS Earn incremental 10% Adjusted ROIC on new EBITDA margin investment Maintain a conservative capital structure greater than WACC
Slide 37: Balanced Business Model: Built for Good Times and Bad
Balanced Business Model BUSINESS MODEL BUILT FOR GOOD TIMES AND BAD Experienced Leadership Our profit center organization model results in a stable of seasoned leaders skilled in managing their business. Flexible Cost Structure These profit centers have highly variable cost structures allowing rapid
Slide 38: Financials
UFP INDUSTRIES FINANCIALS
Slide 39: Lumber Market Impact on Operating Results
BUSINESS MODEL LUMBER MARKET IMPACT ON OPERATING RESULTS Goal: to earn a stable profit per unit 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 impacted by th
Slide 40: Lumber Market
Lumber Market (in $/MBF) $1,450 $1,400 $1,350 $1,300 $1,250 $1,200 $1,150 $1,100 $1,050 $1,000 $950 $900 $850 $800 $750 $700 $650 $600 $550 $500 $450 $400 $350 $300 FINANCIALS LUMBER MARKET Average weekly random lengths framing lumber composite price. Nov Dec @ 2019 @ 2020 @ 202
Slide 41: Lumber Market - SYP
Lumber Market (in $/MBF) $1,200 $1,150 $1,100 $1,050 $1,000 $950 $900 $850 $800 $750 $700 $650 $600 $550 $500 $450 $400 $350 $300 FINANCIALS LUMBER MARKET - SYP 1150 333 Feb Mar Apr May Jun Jul. Aug» Sep. Oct_—Nov Average weekly Southern Yellow Pine composite price. Purchases of SYP comprise almost
Slide 42: Net Sales
© g a 3 8 3 2 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 + FINANCIALS NET SALES $8,636 2017 2018 2019 2020 2021 Long-Term Goal: Unit sales growth of 5% to 7%, including acquisitions 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Percent Change Total Unit Sales Growth organic unit
Slide 43: Unit Sales and Profit Growth
Percent Growth FINANCIALS UNIT SALES AND PROFIT GROWTH 100% 38% 90% 80% 70% Adjusted EBITDA. Growth 60% Gross Profit Growth 50% Unit Sates Growth 40% 30% 20% 13% 10% 0% 6h 6 2017 2018 2019 2020 2021 Long-Term Goal: Achieve Adjusted EBITDA growth exceeding unit sales growth. 2022
Slide 44: Adjusted EBITDA
FINANCIALS Adjusted EBITDA $900 13.0% $850 $800 $750 $700 $650 $600 $550 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 + Adjusted EBITDA margin Adjusted EBITDA (in millions) 5.0% 2017 2018 2019 2020 2021 Non-GAAP Financial Information: This release includes certain financial information not prepa
Slide 45: Margin Improvement Drivers
BUSINESS MODEL MARGIN IMPROVEMENT DRIVERS (v) Operating leverage on sales growth tv) Product mix improvements - New product and core line innovation initiatives - Enhanced capabilities drive conversion from commodity to value-added tv) Strength of market demand [-) Value-based pricing tv) Automation
Slide 46: Return on Invested Capital
Percent 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% FINANCIALS RETURN ON INVESTED CAPITAL 21.0% 15.1% - 7 . . 2017 2018 2019 2020 Hurdle Rate = 12% WACC = 10% (1) Please click here for reconciliation to related GAAP measurement. 32.2% 2021
Slide 47: Cash Cycle
Days FINANCIALS CASH CYCLE 70 2 52.4 54.1 55.7 56.8 50 48.1 40 30 20 10 0 2017 2018 2019 2020 2021 Cash Cycle = Days Receivables Outstanding + Days Supply of Inventory - Days Payables Outstanding
Slide 48: Net Debt
FINANCIALS NET DEBT $ In thousands Dec-21 Dec-20 Dec-19 3.89% series 2012 - Anotes, 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 40,000 40,000 4.27%
Slide 49: Capital Structure
Percent FINANCIALS CAPITAL STRUCTURE Net Debt to Total Capitalization Net Debt to Adjusted EBITDA vs Maximum Target vs Maximum Target. 45% 25 40% 35% 2.0 30% 609 5 9 15 25% 20% 15.7% = 1.0 118% 12.4% 128% 115% 10.2% 10% os | asx 5% 0.06 0.0% 0.0% 00% 9, 00 oe 2012 2013 2014 2015 2016 2017 2018 2019
Slide 50: Balanced Use of Free Cash Flow
BUSINESS MODEL BALANCED USE OF FREE CASH FLOW Current dividend rate of $0.20/quarter effective in Q4 2021, increased annually based on earnings and free cash flow growth Share repurchase goal to offset issuances under share-based compensation plans (2.6M remaining share authorization) CapEx plan of
Slide 51: Selected Income Statement Data: Quarter
FINANCIALS SELECTED INCOME STATEMENT DATA 4 QUARTER $ In thousands, except per share data Q4 2021 Q4 2020 % Change Unit % Change Retail $ 703,897 $ 505,249 39.3 36.0 Industrial 514,854 309,071 66.6 25.0 Construction 677,326 508,254 33.3 15.0 Total Net Sales $ 2,016,805 $ 1,393,708 4h 25.0 Adjusted E
Slide 52: Selected Income Statement Data: Annual Results
FINANCIALS SELECTED INCOME STATEMENT DATA ANNUAL RESULTS $ In thousands, except per share data 2021 2020 % Change Unit % Change Retail $ 3,418,337 $ 2,167,122 S17 31.0 Industrial 2,148,142 1,072,117 100.4 40.0 Construction 2,698,434 1,695,683 59.1 17.0 Ai other arian 20076 0» Total Net Sales $ 8,636
Slide 53: Thank You
__ THANK YOU. 2801 E. Beltline Ave. NE Grand Rapids, MI 49506 (800) 598-9663 - UFPI.com fy¥vy@Gin?P?o
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