Slide 1: Third Quarter 2022
THIRD QUARTER Robert Buck, President & CEO Rob Kuhns, CFO November 1, 2022
Slide 2: Safe Harbor
SAFE HARBOR Statements contained herein reflect our views about future periods, including our future plans and performance, constitute “forward- looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “will,” “woul
Slide 3: TopBuild Snapshot (NYSE: BLD)
TopBuild SAFE Snapshot (NYSE: BLD) HARBOR Key Stats Statements contained herein reflect our views about future periods, including our future plans Sales Breakdown and performance, constitute “forward- looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking sta
Slide 4: Business Update
BUSINESS UPDATE ▪ Strong third quarter results • Solid volume at both business segments, driven by residential backlog and commercial • Adjusted EBITDA margins improved ▪ Distribution International update • Financial performance ahead of expectations • On track to meet or exceed $35M to $40M of syne
Slide 5: Third Quarter Financial Highlights
THIRD QUARTER FINANCIAL HIGHLIGHTS* Adjusted ▪ 53.8% sales increase ▪ 30.4% gross margin, up 80 bps ▪ 17.2% operating margin, up 90 bps ▪ 19.9% EBITDA margin, up 120 bps Same Branch, Adjusted ▪ 22.6% sales increase ▪ 31.3% gross margin, up 170 bps ▪ 18.5% operating margin, up 220 bps ▪ 20.6% EBITDA
Slide 6: Nine Month Financial Highlights
NINE MONTH FINANCIAL HIGHLIGHTS* Adjusted ▪ 54.5% sales increase ▪ 29.7% gross margin, up 110 bps ▪ 16.0% operating margin, up 100 bps ▪ 18.8% EBITDA margin, up 130 bps Same Branch, Adjusted ▪ 20.8% sales increase ▪ 30.8% gross margin, up 220 bps ▪ 17.6% operating margin, up 260 bps ▪ 19.8% EBITDA m
Slide 7: Installation
INSTALLATION ($ in 000s) Three Months Ended Nine Months Ended Comparisons are to the period ended September 30, 2022 September 30, 2022 September 30, 2021 Sales $783,056 $2,208,717 Change 27.8% 26.1% Adjusted Operating Profit* $153,444 $406,613 Change 45.8% 45.4% Adjusted Operating Margin* 19.6% 18.
Slide 8: Specialty Distribution
SPECIALTY DISTRIBUTION ($ in 000s) Three Months Ended Nine Months Ended Comparisons are to the period ended September 30, 2022 September 30, 2022 September 30, 2021 Sales $583,543 $1,715,196 Change 111.1% 114.0% Adjusted Operating Profit* $89,024 $246,769 Change 88.8% 96.7% Adjusted Operating Margin
Slide 9: Capital Allocation
CAPITAL ALLOCATION ▪ Five acquisitions completed in 2022 through 9/30 • Residential insulation • Residential insulation • Residential insulation • Residential insulation • Residential insulation • $1.7M annual revenue • $6.5M annual revenue • $2.0M annual revenue • $5.5M annual revenue • $1.6M annua
Slide 10: Capex, Working Capital & Cash Flow
CAPEX, WORKING CAPITAL & CASH FLOW $ in 000s Nine Months Ended Nine Months Ended September 30, 2022 September 30, 2021 CAPEX $56,044 $42,320 Operating Cash Flow $335,630 $309,505 September 30, 2022 September 30, 2021 Cash Balance $159,384 $327,906 September 30, 2022 September 30, 2021 Working Capita
Slide 11: Flexible Capital Structure
FLEXIBLE CAPITAL STRUCTURE Capital Summary & Financial Highlights ($M) Capital Structure (As of September 30, 2022) Debt Maturity Schedule ($M) September 30, 2022 $574 Cash $ 159.4 Senior Secured $500 Term Loan 4.125% $400 Total Debt $ 1,484.4 3.625% Senior Notes Senior Notes Net Debt $1,325.0 TTM P
Slide 12: 2022 Outlook
2022 OUTLOOK (as of November 1, 2022) SALES ADJUSTED EBITDA* $4,950M to $5,000M $915M to $935M • Low end raised by $150M • Low end raised by $55M • High end raised by $100M • High end raised by $35M STRONG SALES AND EBITDA GROWTH * See Appendix for Reconciliation 12
Slide 13: Our Business Model
OUR BUSINESS MODEL Core Strengths Our Values ▪ Unrivaled North American scale ▪ Operational excellence focused on continuous improvement ▪ Laser focus on core business, insulation ▪ Greater end-market diversification to minimize cyclicality ▪ Exceptional service and reliability ▪ Focus on safety ▪ O
Slide 14: Safety Is a Core Value / Leader in All Three End-Markets
A LEADER IN ALL THREE END-MARKETS WE SERVE SAFETY IS A CORE TOTAL ADDRESSABLE VALUE MARKET of ~$16.0B Safety is not a choice, it’s engrained END-MARKET in our culture andOUR SHARE MARKET SIZE OUR FOCUS expectations of conduct Incident Rate1 Zero-accident safety culture • Superior labor network ~40%
Slide 15: Safety Is a Core Value
Our ESG Focus SAFETY IS A CORE VALUE ENVIRONMENTAL ▪ Safety is not a choice, it’s engrained in our culture and expectations of • Utilize materials often made from recycled, re-used and long-lasting materials conduct Incident Rate1 • Waste minimization program ▪ • Centralized Zero-accident safety fle
Slide 16: Our ESG Focus
Our OURESG ESG Focus FOCUS ENVIRONMENTAL ENVIRONMENTAL • ▪ Utilize materials Utilize materials often made often madefrom recycled, from re-used recycled, and re-used long-lasting and materials long-lasting materials • ▪ Waste Waste minimization minimization program program • ▪ Centralized Centralize
Slide 17: Our Business Is Inherently Environmentally Friendly
Our ESG Focus OUR BUSINESS IS INHERENTLY ENVIRONMENTALLY FRIENDLY ENVIRONMENTAL ▪ Insulation products • Utilize we materials install often andrecycled, made from distribute significantly re-used and long-lasting materials enhance energy • Waste efficiency minimization program • Centralized fleet man
Slide 18: Our Goals
OUR GOALS ▪ Strive for ZERO safety incidents ▪ Develop a diverse and inclusive workforce ▪ Embrace change to drive continuous improvement ▪ Build local relationships and exceed customer expectations ▪ Create valued long-term partnerships with suppliers ▪ Make a difference in our communities ▪ Promot
Slide 19: Appendix
oN a APPENDIX
Slide 20: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION (unaudited) ($ in 000s)
Slide 21: Segment Data
SEGMENT DATA (unaudited) ($ in 000s) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 Change 2022 2021 Change Installation Sales $ 783,056 $ 612,900 27.8 % $ 2,208,717 $ 1,751,278 26.1 % Operating profit, as reported $ 154,236 $ 105,046 $ 406,835 $ 277,748 Operating margin,
Slide 22: Margin Reconciliation
MARGIN RECONCILIATION (unaudited) ($ in 000s) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gross profit, as reported $ 395,748 $ 250,291 $ 1,111,046 $ 691,229 Gross margin, as reported 30.4 % 29.6 % 29.7 % 28.5 % Acquisition related costs — — 121 — COVID-19 pa
Slide 23: Same Branch and Acquisition Metrics
SAME BRANCH AND ACQUISITION METRICS (unaudited) ($ in 000s) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net Sales Same branch $ 1,037,278 $ 845,757 $ 2,926,330 $ 2,422,810 Acquisitions (a) 263,720 — 817,871 — Total $ 1,300,998 $ 845,757 $ 3,744,201 $ 2,422,81
Slide 24: Same Branch and Acquisition Metrics
SAME BRANCH AND ACQUISITION METRICS (unaudited) ($ in 000s) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 EBITDA, as adjusted Same branch $ 213,412 $ 158,222 $ 578,847 $ 423,876 Acquisitions (a) 45,803 — 124,351 — Total $ 259,215 $ 158,222 $ 703,198 $ 423,876 E
Slide 25: Income Per Common Share Reconciliation
INCOME PER COMMON SHARE RECONCILIATION (unaudited) ($ in 000s except share and per common share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income before income taxes, as reported $ 208,010 $ 128,369 $ 554,216 $ 326,115 Rationalization charges (807)
Slide 26: Acquisition Adjusted Net Sales
ACQUISITION ADJUSTED NET SALES (unaudited) ($ in 000s) Trailing Twelve 2021 2022 Months Ended Q4 Q1 Q2 Q3 September 30, 2022 Net Sales $ 1,063,398 $ 1,168,918 $ 1,274,285 $ 1,300,998 $ 4,807,599 Acquisitions proforma adjustment † 49,639 2,934 438 - 53,011 Net sales, acquisition adjusted $ 1,113,037
Slide 27: Reconciliation Guidance Table
RECONCILIATION GUIDANCE TABLE (unaudited) ($ in 000,000) Twelve Months Ending December 31, 2022 Low High Estimated net income $ 525.0 545.7 Adjustments to arrive at estimated EBITDA, as adjusted: Interest expense and other, net 56.5 54.5 Income tax expense 184.5 191.8 Depreciation and amortization 1
Slide 28: TopBuild
4 TopBuild