Installed Building Products, Inc. · NYSE:IBP
Installed Building Products — Q3 2021 Earnings Presentation
31 slides from Installed Building Products's earnings presentation, Nov 4, 2021
Slide 1: Installed Building Products Q3 2021
INSTALLED BUILDING PRODUCTS Q3 2021 Reported November 4, 2021
Slide 2: Disclaimer
Disclaimer Q3 2021 IR Presentation This presentation contains “forward-looking statements” as defined under U.S. federal securities laws. Forward-looking statements are generally identified by the use of the words “will,” “may,” “believes,” “expects,” “forecasts,” “intends,” “anticipates,” “projects
Slide 3: Strategy Overview
Strategy Overview Installed Building Products
Slide 4: IBP Growth Strategy
IBP Growth Strategy 3% 7% Insulation 3% Waterproofing 4% Geographic 5% Shower doors, shelving & mirrors ✓ Accretive acquisitions in primary residential end Q3 2021 Garage doors market 7% Revenue by Rain gutters ✓ Lead market entrance with insulation installers End Product 64% Fireproofing/firestoppi
Slide 5: Annual Operating Framework
Annual Operating Framework 2016 - 2020 Long-Term Acquisition Growth History Outlook Assumptions Target about $100M of Outpace market acquired revenue Organic Revenue Growth 5% - 16% completions annually Benefits to GM from Gross Profit Margin 27.8% - 30.8% Stable purchasing power and product diversi
Slide 6: Growth-Focused Capital Allocation Strategy
Growth-Focused Capital Allocation Strategy Capital and Cash Flow Priorities Capital Allocation (in thousands) Acquisitions are Main Use of Capital Acquisition Cap Ex Share Repurchase Supports efficient and proven growth strategy $200,000 Generates compelling IRR $180,000 Acquisitions contribut
Slide 7: National Scale
National Scale Strong Local Presence ✓ One of the nation’s largest1 new residential insulation installers ✓ Diversified installer of complementary building products, including waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mir
Slide 8: Successful Track Record of Acquisitions
Successful Track Record of Acquisitions Acquirer of choice with over 160 successfully integrated acquisitions Long-Term Strategy of Pursing Value-Enhancing Strategic Acquisitions • Key components include: Recovery ✓ Ability to realize synergies within scalable infrastructure Expansion ✓ Target profi
Slide 9: Diverse Service and Product Offering
Diverse Service and Product Offering Product Offering Competitive Benefits of Diverse ▪ Installs a wide range of insulation and air sealing materials Service and Product Offering including fiberglass insulation, spray foam insulation and cellulose Insulation insulation Cross Selling Opportunities ▪
Slide 10: Housing Market Case Study
Housing Market Case Study Revenues per residential permit in IBP’s established market is 4.6x higher than a developing market Established Market Developing Market Insulation Revenues as a Percent of Market Revenues Diversity in IBP’s established market is driven by 55% 91% complementary installation
Slide 11: Non-Insulation Market Opportunities
Non-Insulation Market Opportunities The market for each complementary product is highly fragmented, providing acquisition opportunities and leverage with existing relationships to grow in current IBP markets • Total IBP market share is • Total IBP market share is approximately 2%* approximately 6%*
Slide 12: Commercial Opportunities
Commercial Opportunities Expand current products in existing large commercial branches and grow repair and remodel opportunities • Firestop is passive protection • Maintain structural that impedes the passage of integrity of steel and fire, smoke and gases in a fire- concrete exposed to fire rated f
Slide 13: ESG Highlights
ESG Highlights Installed Building Products Click to view or download our ESG Report
Slide 14: Environmental
Environmental Commitment to Sustainability ✓Energy Efficiency ▪ Our customers are creating homes in the houses we build with them, and that includes keeping their families safe and warm while also saving energy. ✓Responsible Materials ▪ Responsible material usage is something we consider in every in
Slide 15: Social and Governance Responsibility
Social and Governance Responsibility Commitment to our Employees Employee Benefits Medical insurance 401k Paid time-off benefits Employee Programs Longevity-based stock awards Financial wellness program Installed Building Products Foundation Opportunities Professional growth ✓Enhances
Slide 16: Diversity, Equity and Inclusion (DE&I)
Diversity, Equity and Inclusion (DE&I) Initiatives Management training programs will be adjusted to ensure opportunities are provided 1 to employees consistent with the demographics to address minority representation in management and sales positions, as well as gender income equality Assessment of
Slide 17: Community & Employee Engagement
Community & Employee Engagement Commitment to our Employees and Communities we Serve INSTALLED BUILDING PRODUCTS FOUNDATION “Our mission is to prevent and alleviate homelessness, and the IBP Foundation has been a crucial driving force in helping us $1.0 million in scholarships have been committed to
Slide 18: Financial Performance
Financial Performance Installed Building Products
Slide 19: Strong Top-Line Momentum
Strong Top-Line Momentum 20.2% CAGR from 2014 to LTM 2021 $1,876 $1,653 $1,512 $1,336 (In millions) $1,133 $863 $663 $432 $518 $223 $238 $301 LTM 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 9/2021 Revenue Growth -3.9% 7.0% 26.3% 43.4% 19.9% 27.9% 30.2% 31.3% 18.0% 13.1% 9.4% 16.3% Total U
Slide 20: Sales Growth
Sales Growth Q3 2021 compared to Q3 2020 Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Period-over-period Growth Sales Growth 21.2% 6.1% 18.4% 9.1% Same Branch Sales Growth 11.2% 1.7% 8.9% 5.1% 1 Our commercial end market consists of Single-Family Sales Growth
Slide 21: Summary Financial Results
Summary Financial Results (in millions) 2016 2017 2018 2019 2020 Q1 2021 Q2 2021 Q3 2021 LTM 9/2021 Net Revenue $ 863 $ 1,133 $ 1,336 $ 1,512 $ 1,653 $ 437 $ 488 $ 510 $ 1,876 1 % Net Revenue Growth 30.2% 31.3% 18.0% 13.1% 9.4% 10.0% 23.9% 21.2% 16.3% Same Branch Sales Growth 15.6% 9.8% 11.5% 8.6% 4
Slide 22: Strong Balance Sheet
Strong Balance Sheet ($ in millions) 2016 2017 2018 2019 2020 Q3 2021 Cash $ 14.5 $ 62.5 $ 90.4 $ 177.9 $ 231.5 $ 191.4 Short-Term Investments - 30.1 10.1 38.0 - - 1 Senior Notes, net of unamortized debt issuance costs - - - 295.2 295.8 296.2 2 Term Loan, net of unamortized debt issuance cost 95.8 2
Slide 23: Improving Financial Performance
Improving Financial Performance Adjusted Gross Profit1 Adjusted Selling & Administrative2 ($ in millions) ($ in millions) 1 Adjusted Gross Profit is a non-GAAP financial measure. A reconciliation to the most 2 Adjusted S&A is a non-GAAP financial measure. A reconciliation to the most comparable meas
Slide 24: COVID Impact
COVID Impact Installed Building Products
Slide 25: Supply Chain Disruptions
Supply Chain Disruptions As we continued to buy material from home centers and distributors due to manufacturer supply shortages, we estimate the following impacts on our 3Q21 financial results: ▪ Gross profit was reduced by approximately $2.0 million with an estimated impact of 40 basis points on g
Slide 26: Appendix
Appendix Installed Building Products
Slide 27: EBITDA & Adjusted EBITDA Reconciliation
EBITDA & Adjusted EBITDA Reconciliation (in millions) 2016 2017 2018 2019 2020 Q3 2020 Q1 2021 Q2 2021 Q3 2021 LTM 9/2021 Net income $ 38.4 $ 41.1 $ 54.7 $ 68.2 $ 97.2 $ 28.1 $ 17.3 $ 37.2 $ 34.9 $ 117.2 Interest expense 6.2 17.4 20.5 28.1 30.3 7.6 7.6 7.5 7.7 30.4 Provision for income taxes 21.2 14
Slide 28: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation Three months ended September 30, Nine months ended September 30, (in millions except for share and per share data ) 2021 2020 2021 2020 Net income, as reported $ 34.9 $ 28.1 $ 89.4 $ 69.4 Adjustments for adjusted net income: Share based compensation expense 3.5 2.6
Slide 29: Adjusted S&A
Adjusted S&A (in millions) 2016 2017 2018 2019 2020 Q1 2021 Q2 2021 Q3 2021 LTM 9/2021 S&A $ 175.1 $ 222.9 $ 253.0 $ 289.2 $ 319.6 $ 85.9 $ 89.1 $ 92.2 $ 349.2 Legal settlement and reserves - - 1.0 1.2 - - - - - Acquisition related expenses 2.3 3.2 2.7 2.1 2.8 1.2 0.7 (0.3) 2.4 Share-based compensat
Slide 30: Adjusted Cost of Sales and Adjusted Gross Profit Reconciliations
Adjusted Cost of Sales and Adjusted Gross Profit Reconciliations (in millions) 2016 2017 2018 2019 2020 Q3 2020 Q1 2021 Q2 2021 Q3 2021 LTM 9/2021 Net revenues $ 863.0 $ 1,132.9 $ 1,336.4 $ 1,511.6 $ 1,653.2 $ 420.5 $ 437.1 $ 488.1 $ 509.8 $ 1,876.4 Cost of Sales $ 610.5 $ 808.9 $ 964.8 $ 1,076.8 $
Slide 31: Q&A
Q&A Installed Building Products
Installed Building Products — Q3 2021 Earnings Presentation on 6ix