Ufp Industries, Inc. · NASDAQ:UFPI
Ufp Industries — Investor Presentation (August 2022)
36 slides from Ufp Industries's investor presentation, Aug 10, 2022
Slide 1: 2022 Investor Relations Presentation Results through June 30, 2022
1 2022 Investor Relations Presentation Results through June 30, 2022
Slide 2: Forward-looking statements and non-GAAP information
2 UFP INDUSTRIES, INC. 2022 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,
Slide 3: UFP Industries holding company overview
3 UFP Industries is a holding company whose operating subsidiaries – UFP Industrial, UFP Construction and UFP Retail Solutions – manufacture, distribute and sell a wide variety of value - added products used in residential and commercial construction, outdoor living, packaging and other industrial a
Slide 4: UFP at a Glance
4 40% 31% 24% 5% Based on 2021 Sales INTRODUCTION UFP AT A GLANCE 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 2022 Industrial - $2.1B Ind
Slide 5: Where We Are: 2022 Locations
5 INTRODUCTION WHERE WE ARE 2022 186 2 4 1 11 1 5 211 Locations 1 Page 5 of 36
Slide 6: Our Performance
6 OUR PERFORMANCE 2022 7.2% Adjusted EBITDA Margin 8.4% 9.7% $4,416 Net Sales $5,154 $8,636 $180 Net Earnings (ACI) $247 $536 0.0 Net Debt to Adjusted EBITDA 0.0 0.06 15.1% ROIC 21.0% 32.2% 2019 2020 2021 Unit sales growth rate 6% 6% 28% $ Sales in Millions Growth rate 21% 37% 117% Non - GAAP Financ
Slide 7: Long-Term Financial Goals
7 BUSINESS MODEL LONG - TERM FINANCIAL GOALS 2022 Annual unit sales growth of 5 - 7 percent, including small acquisitions 10% Adjusted EBITDA margin Earn incremental return on new investment greater than WACC Maintain a conservative capital structure Page 7 of 36
Slide 8: Value-Added Transformation
8 2022 VALUE - ADDED TRANSFORMATION Page 8 of 36
Slide 9: Innovation and New Products
9 BUSINESS MODEL INNOVATION AND NEW PRODUCTS 2013 $426m 3% 10% $85m New Products 2022 2019 2021 10% $540m 2013 % of Sales Sales % of Sales Sales % of Sales Sales $842m 10% 2020 % of Sales Sales Page 9 of 36
Slide 10: Management Structure Evolution
10 MANAGEMENT STRUCTURE EVOLUTION Since our founding through 2019, we managed our people and plants regionally. Beginning January 1, 2020, we realigned our management teams to focus specifically on business segments rather than geographies. At the same time, we changed our name to better reflect the
Slide 11: Acquisitions
11 BUSINESS MODEL ACQUISITIONS 2022 PROCESS Identify attractive growth runways in each Business Unit under each Business Segment and identify gaps in our capabilities to pursue those runways. PURPOSE Find new products and services to speed our transformation from commodity sales to value - added sel
Slide 12: Business Model: Acquisitions (PalletOne, Sunbelt, Gilmores)
12 BUSINESS MODEL 2022 PalletOne , Inc. Th e 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 specialized industrial packaging, including custom bins and crates, and its Sun
Slide 13: Business Model: Acquisitions (Boxpack, Ficus Pax, Advantage Labels)
13 BUSINESS MODEL 2022 Boxpack Packaging Based near Melbourne, Australia, specializes in flexographic and lithographic cardboard packaging, using the latest CAD design and finishing techniques. Boxpack broadens the portfolio of packaging solutions provided by UFP’s UBEECO Group in Australia. 2020 An
Slide 14: A Unique Culture Built for Good Times and Bad
14 BUSINESS MODEL A UNIQUE CULTURE BUILT FOR GOOD TIMES AND BAD 2022 Strong Balance Sheet Return - focused approach to capital allocation. Capital reserves used opportunistically. Average management team tenure: 23 years. 67 straight years of profitability. Every plant is a profit center and all emp
Slide 15: UFP Industries Business Segments
15 UFP INDUSTRIES BUSINESS SEGMENTS 2022 Page 15 of 36
Slide 16: Business Segments: Retail Solutions Sales
16 BUSINESS SEGMENTS 2022 2013 Value - added as a % of Net Sales 2013 $284m 19% 15% $402m $510m 19% 2019 2020 2021 Sales % of Sales Commodity Value - added 2019 2020 2021 58% 42% 46% 43% 57% 54% Sunbelt $774M 2021 DecKorators $249M** 2021 UFP Edge $545M*** 2021 Prowood $1,743M* 2021 *Includes $393M
Slide 17: Business Segments: Retail Solutions
17 Deckorators.com BUSINESS SEGMENTS RETAIL SOLUTIONS 2022 ProWoodLumber.com OutdoorEssentialProducts.com UFPEdge.com On - trend brands to all major building products retailers, while supporting customers with best - in - class in - store and e - commerce support. Outdoor lifestyle products includin
Slide 18: Business Segments: Industrial Sales
18 2022 2013 $69m 6% New Products & % of Net Sales 8% $73m $177m 7% 2019 2020 2021 Sales % of Sales 2013 35% 66% 34% 68% 32% 65% Commodity Value - added 2019 2020 2021 Value - added as a % of Net Sales Note: Lumber price appreciation more significantly impacts commodity - based products compared to
Slide 19: Business Segments: Industrial
19 2022 BUSINESS SEGMENTS INDUSTRIAL Innovative packaging solutions and components backed by a global manufacturing footprint, the industry’s leading engineering and design, and integrated service teams. Corrugated, stretch/shrink films, labels, machine applicators, facility supplies, hardware and s
Slide 20: Business Segments: Construction Sales
20 BUSINESS SEGMENTS 2022 2013 $60m 4% 5% $54m $136m 3% 2019 2020 2021 Sales % of Sales 2013 24% 81% 19% 73% 27% 76% Commodity Value - added 2019 2020 2021 Value - added as a % of Net Sales Factory - Built $1.1B 2021 Commercial $259M 2021 Concrete Forming $150M 2021 Site - Built $1.2B* 2021 YTD Q2:
Slide 21: Business Segments: Construction
21 Roof trusses, wall panels, floor systems, doors and framing services for residential and light commercial builders. Sales are 65% single family, 35% multifamily. 2022 Roof trusses, floor joists, laminated wall panels, cabinet components, countertops and milled components for modular and manufactu
Slide 22: Business Segments: International
22 Trades lumber, packaging and building materials in 65 countries to supply local and multinational customers across major markets. Global industrial packaging solutions provider with manufacturing and distribution facilities in Canada, Mexico, Italy, Australia and India. BUSINESS SEGMENTS 2022 202
Slide 23: Sustainability Continuum
23 SUSTAINABILITY CONTINUUM 2022 Drive operational excellence throughout the enterprise Cultivate a unique, rewarding culture throughout the UFP family of companies Provide significant opportunity for professional and personal growth Support communities in which we operate Supply exceptional product
Slide 24: Our Sustainability Philosophy
24 2022 OUR SUSTAINABILITY PHILOSOPHY We have always believed profitability, asset values and shareholder return are optimized by acting responsibly, and that our investors experience higher sustainable returns when we support our customers, employees and communities . Our views on maintaining a sus
Slide 25: Financials
)) UFP INDUSTRIES FINANCIALS
Slide 26: Managing Lumber Market Risk to Earn a Stable Profit Per Unit
26 MANAGING LUMBER MARKET RISK TO EARN A STABLE PROFIT PER UNIT 2022 Level of lumber prices does not drive profitability Lumber Market (in $/MBF)* 2021 2020 2022 2019 *Average weekly random lengths framing lumber composite price. Lumber Market Sequential trends impact profit per unit Balanced mix of
Slide 27: Net Sales
27 FINANCIALS 2022 NET SALES (in millions) Long - Term Goal: Unit sales growth of 5% to 7%, including small acquisitions Net Sales Percent Change $4,489 $4,416 $5,154 $8,636 6% 6% 6% 28% 3% 5% 5% 4% 0% 10% 20% 30% 40% $- $2,000 $4,000 $6,000 $8,000 $10,000 Organic Unit Sales Growth Total Unit Sales
Slide 28: Adjusted EBITDA
28 UFP Consolidated UFP Industrial UFP Retail Solutions UFP Construction FINANCIALS ADJUSTED EBITDA (in millions) 2022 Non - GAAP Financial Information: Please click here for reconciliation to related GAAP measurement. Adjusted EBITDA Adjusted EBITDA Margin Adjusted EBITDA Margin Adjusted EBITDA $26
Slide 29: Adjusted EBITDA Growth and Unit Sales
29 UFP Consolidated UFP Industrial UFP Retail Solutions FINANCIALS ADJUSTED EBITDA GROWTH AND UNIT SALES 2022 Percent Growth 6% 6% 28% 19% 36% 94% 0% 20% 40% 60% 80% 100% 2019 2020 2021 Unit Sales Growth Adjusted EBITDA Growth Long - Term Goal: Achieve Adjusted EBITDA growth exceeding unit sales gro
Slide 30: Return on Invested Capital
30 FINANCIALS RETURN ON INVESTED CAPITAL 2022 Hurdle Rate = 12% WACC = 10% Percent 13.2% 14.0% 15.1% 21.0% 32.2% 0% 5% 10% 15% 20% 25% 30% 35% 2017 2018 2019 2020 2021 Non - GAAP Financial Information: Please click here for reconciliation to related GAAP measurement. Long - Term Goal: Earn an increm
Slide 31: Cash Cycle
31 FINANCIALS CASH CYCLE 2022 Cash Cycle = Days Receivables Outstanding + Days Supply of Inventory – Days Payables Outstanding Days 52.4 54.1 55.7 48.1 56.8 0 10 20 30 40 50 60 70 2017 2018 2019 2020 2021 Page 31 of 36
Slide 32: Capital Structure
32 FINANCIALS CAPITAL STRUCTURE 2022 Percent Net Debt to Total Capitalization vs Maximum Target Net Debt to Adjusted EBITDA vs Maximum Target 11.8% 11.5% 12.4% 0.0% 10.2% 12.8% 15.7% 0.0% 0.0% 2.5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1.10 0.80 0.72
Slide 33: Balanced Use of Free Cash Flow
33 BALANCED USE OF FREE CASH FLOW 2022 Acquisitions to contribute half of our total annual unit sales growth CapEx plan of $175M to $225M in 2022 Opportunistic share repurchases to offset issuances Increasing dividends $349 $336 $512 $25 $31 $40 $29 $85 $89 $151 $39 $65 $476 Acquisitions Capex Share
Slide 34: Net Sales Q2 2022
34 FINANCIALS 2022 NET SALES Q2 2022 (in millions) $2,094 $2,017 $2,489 $2,901 Q3 2021 Q4 2021 Q1 2022 Q2 2022 UFP Consolidated Organic Unit Sales YOY Growth Total Unit Sales YOY Growth Net Sales $ 696 $ 704 $ 993 $ 1,121 Q3 2021 Q4 2021 Q1 2022 Q2 2022 UFP Retail Solutions $573 $515 $611 $676 Q3 20
Slide 35: Adjusted EBITDA Q2 2022
35 FINANCIALS 2022 ADJUSTED EBITDA Q2 2022 (in millions) $2.9 $2.0 $2.1 Q3 2021 Q4 2021 Q1 2022 Q2 2022 UFP Consolidated $292 $223 $187 $319 Non - GAAP Financial Information: Please click here for reconciliation to related GAAP measurement. Adjusted EBITDA Margin Adjusted EBITDA $2.9 $2.0 $2.1 $(21)
Slide 36: Thank You
36 2801 E. Beltline Ave. NE Grand Rapids, MI 49506 (800)598 - 9663 - UFPI.com THANK YOU.