Simpson Manufacturing Company, Inc. · NYSE:SSD
Simpson Manufacturing — Investor Presentation (November 2024)
36 slides from Simpson Manufacturing's investor presentation, November 2024
Slide 1: Strong Foundation. Stronger Future.
STRONG FOUNDATION. STRONGER FUTURE. Simpson Manufacturing Co., Inc. Investor Presentation November 2024
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generall
Slide 3: Investment Highlights
Investment Highlights Industry leader with strong business model, accelerating above market top-line growth(1), high brand recognition and trusted reputation Diversified product offerings and geographies with ~50% exposure to the U.S. housing market Leadership position in structural solutions for wo
Slide 4: 30-Year Trading History
30-Year Trading History 5/25/1994 10/30/2017 7/29/2019 3/24/2020 3/23/2021 12/29/2021 3/1/2024: Initial public offering Announced 2020 Updated certain COVID-19 pandemic Announced 5 Year Announced binding SSD closes at all- Plan to improve declared at $11.50 (or $2.875 operational 2020 Plan targets C
Slide 5: Simpson's Brand and Culture
Simpson’s Brand and Culture At Simpson, we describe the unique culture of our organization as our “Secret Sauce.” OUR MISSION OUR COMPANY VALUES 1. Relentless Customer Focus 2. Long-Range View 3. High-Quality Products To provide solutions that 4. Be The Leader help people design and build 5. Everybo
Slide 6: Why Simpson?
Our Strong Business Model Innovation leader Broad portfolio of structural solutions A dedication to innovation through An increasingly broad portfolio of products extensive research and development, and software, and a commitment to academic partnerships, and state-of- developing complete solutions
Slide 7: Innovation Leader
Innovation Leader Simpson is a pioneer of construction solutions and the industry standard for structural connectors. EXPANSION INTO FIRST OPENED STEEL SHEAR WALLS EXPANSION INTO HOLDOWN TYE GILB TEST LAB STAINLESS STEEL FASTENERS FIRST CONNECTOR EXPANSION INTO FASTENERS NYSE CONNECTOR LISTING MARKE
Slide 8: Innovation Leader (Continued)
Innovation Leader (Continued) Simpson is an innovation leader in fasteners, concrete repair, lateral systems, construction software and structural steel solutions. EXPANSION INTO EUROPEAN EXPANSION INTO BUILDER COMMERCIAL FURTHER EXPANSION INTO & LBM SOFTWARE BUILDING MARKET EXPANSION INTO TRUSS SOF
Slide 9: Innovation Leader (Continued)
Innovation Leader (Continued) A dedication to innovation through extensive research and development, academic partnerships and state-of-the-art structural testing. Innovation by the numbers(1) Testing is in our DNA 315 8 123 Engineers Accredited Code Test Labs Reports 504 210 1,743 Patents Patents T
Slide 10: Broad Portfolio of Solutions
Broad Portfolio of Solutions Broad and deep product offering with 18,000 standard and custom products for wood, concrete, steel, and digital solutions to make it easier to specify and order our products. Wood Connection Products Fastening Systems Concrete Connection Products Wood connectors, shearwa
Slide 11: Serving Our Customers and Industry
Serving Our Customers and Industry Our customer-centric approach and commitment to relentless service differentiates us from other vendors and suppliers. Longstanding relationships Unparalleled availability and delivery • 26 of top 30 builders on our builder program • ~98% product fill rate • Progra
Slide 12: Core Addressable Market
Core Addressable Market(1) Wood Connectors Fasteners Concrete Connections & Truss Market Market Market Size/ Size Size Addressable $10.1 B $15.0 B Market $2.5 B Addressable Addressable Market Market $1.7 B (17%) $1.3 B (9%) SSD Share SSD Share SSD Share $1.4 B $0.5 B $0.3 B (56%) (31%) (25%) Many op
Slide 13: Key End Use Markets in North America
5 Key End Use Markets in North America Our market focused approach enables us to better serve current customers and identify opportunities to reach new customers and product opportunities. 13
Slide 14: Residential
Residential KEY MARKET FOCUS AREAS STRATEGY • Single family construction • Build and maintain strong relationships with top • Multifamily construction Builders and pro-dealers • Outdoor living (e.g. decks, pergolas, fences) • Specify and create demand through national builders • Repair, remodel and
Slide 15: Commercial
Commercial KEY MARKET FOCUS AREAS STRATEGY • Call on and educate architects, engineers, and designers to • Retail and office buildings drive specifications • Institutional (education, healthcare) • Provide training and support to contractors and distributors • Public and utilities (water supply, pip
Slide 16: OEM
OEM KEY MARKET FOCUS AREAS STRATEGY • Off-site construction (manufactured housing, modular • Aligned with our business model; identify construction, post-frame construction, prefab sheds) opportunity for existing connectors, fasteners, • Mass timber construction anchors and truss plates products int
Slide 17: National Retail
National Retail KEY MARKET FOCUS AREAS STRATEGY • Large home centers • Improve retail execution through merchandising, product development, and marketing • Co-ops / retail chains • Farm & hardware supply retailers • Continue expanding availability of all product lines, and increase in-store training
Slide 18: Component Manufacturers
Component Manufacturers KEY MARKET FOCUS AREAS STRATEGY • Component manufactures who build roof and floor • Continue to develop functional, stable, open software trusses, offer EWP solutions and/or wall panel solutions • Continue to increase truss plate manufacturing • Equipment solutions capacity t
Slide 19: Digital Solutions
Digital Solutions Our goal is to leverage and offer a suite of integrated, technology solutions across our value chain to connect building industry stakeholders, improve construction processes, and be the partner of choice. Key focus areas to make it easier to specify and Specifiers Building Materia
Slide 20: Digital Solutions (Continued)
Digital Solutions (Continued) Design/visualization, estimating Project management and design ~30 specification tools (apps/selectors) Free design software and plans Option management, estimating Building out our digital offerings to serve customers across the building industry 20
Slide 21: Europe Strategy
Europe Strategy Focused on above market growth and a 15% operating income margin in Europe. • Continue ETANCO(1) integration and realize synergies: Offensive Synergies Defensive Synergies ▪ Expand market share ▪ Procurement optimization ▪ Enhance portfolio of solutions ▪ Manufacturing efficiencies ▪
Slide 22: Strong Business Drives Stockholder Value
Strong Business Drives Stockholder Value Our 2023 Sales by Product… EPS ($ USD Millions) Other $12 $8.26 $7.76 Concrete Construction $6.12 $321 $4.27 Wood $2.72 $2.98 Construction $1.86 $1.94 $1.29 $1.38 $1,882 $0.87 $1.05 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 and Across Operat
Slide 23: Historical Market and Financial Performance
Historical Market and Financial Performance Total Company Revenue & Profitability Relative to U.S. Housing Starts $2,200 2.0 $2,000 1.8 $1,800 1.6 $1,600 1.4 Housing Starts (M) $1,400 1.2 $1,200 ($M) 1.0 $1,000 0.8 $800 0.6 $600 0.4 $400 $200 0.2 $0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2
Slide 24: Accelerating Above Market Growth
Accelerating Above Market Growth Our North America operations continue to outperform U.S. housing and we are highly focused on accelerating above market volume growth beyond historical average performance while continuing to pursue top quartile profitability. ~8% pts. on avg. above market ~2.5% pts.
Slide 25: Investments to Accelerate Above Market Growth
Investments to Accelerate Above Market Growth Recent and future strategic investments in both OPEX and CAPEX are crucial to achieving our company ambitions. Capital Investment Human Capital Improve Go to Market Digital Solutions ▪ Productivity ▪ Build out sales and ▪ Market focused teams ▪ Digital s
Slide 26: Operating Income Margin Outperformance
Operating Income Margin Outperformance Simpson Historical Operating Income Margin Versus Proxy Peer Average(1) 25.0 23.4% 21.7% 21.5% 19.9% 19.9% 20.0 19% - 19.5%(2) 16.5% 16.0% 15.9% 15.1% 16.6% 15.0 14.1% 14.2% 13.8% 15.8% 13.2% 13.3% 12.3% 14.2% 11.6% 13.9% 13.2% 13.5% 12.9% 12.7% 9.4% 10.0 10.9%
Slide 27: ROIC Relative to Proxy Peers
ROIC(1) Relative to Proxy Peers(2) 30.0% 24.6% 25.0% 21.2% 20.0% 20.0% 16.9% 17.2% 18.2% 15.3% 18.0% 17.5% 14.5% 17.2% 15.0% 16.6% 12.9% 14.6% 14.5% 13.0% 10.5% 10.6% 13.8% 12.9% 10.0% 10.0% 7.9% 7.3% 7.5% 6.6% 6.3% 10.1% 9.9% 5.8% 5.4% 5.0% 1.6% 5.5% 0.0% 0.7% 0.4% -1.0% -5.0% -10.0% -10.0% -15.0%
Slide 28: Well-Positioned to Drive Growth
Well-Positioned to Drive Growth We are well-positioned to execute our growth strategy given our demonstrated commitment to disciplined capital allocation. $79 $44 $811 $427 $400 $206 $208 $182 $160 $141 $158 $151 $50 $116 $111 $76 $45 $61 $24 $23 $40 $40 $42 $40 $2 $7 $8 $6 $89 $29 $33 $33 $44 $62 2
Slide 29: Capital Return History
Capital Return History $880.7 Million 2021 – 2024 YTD(1) Cumulative Free Cash Flow defined as: Cash flow from operations ($1,200.5 M) less Capital expenditures ($319.8 M) Repurchases of Quarterly Cash Common Stock(2) Dividends 23.0% 18.8% (1) Time frame represents January 1, 2021 to September 30, 20
Slide 30: Use of Cash Priorities
Use of Cash Priorities Cash Flow Past and Potential Future Uses of Cash Flows From Operations • Prioritizing facility expansions (capacity, service, efficiencies and safety) Organic Growth • Investing in growth initiatives (engineering, marketing, sales personnel, testing capabilities, etc.) • Evalu
Slide 31: Acquisition Strategy
Acquisition Strategy Evaluate potential M&A opportunities to accelerate traction on our key growth initiatives • Focused on strengthening our business model by expanding our product lines to develop complete solutions for the markets in which we operate • Improve our manufacturing capabilities and s
Slide 32: US Housing Starts
US Housing Starts(1) There is a sizable shortage of new homes after more than a decade of under-building relative to population growth. 2,500 Target housing starts needed to keep up 2,000 with demand 1,500 1,000 500 0 US Housing Starts New home construction dropped steeply after the recession and ha
Slide 33: Sustainability, Environmental and Social Responsibility
Sustainability, Environmental and Social Responsibility We operate in an environmentally responsible manner to protect our employees, customers and communities while prioritizing an inclusive, equitable and diverse company Environmental Social Responsibility Committed to continuously improving the e
Slide 34: Company Ambitions
Company Ambitions 1 Strengthening our values-based culture 2 Being the business partner of choice 3 Striving to be an innovative leader in the markets we operate 4 Continuing above market growth relative to U.S. housing starts 5 Returning to the top quartile of our proxy peers for operating income m
Slide 35: Return on Invested Capital (ROIC) Definition
Return on Invested Capital (“ROIC”) Definition When referred to in this presentation, return on invested capital (“ROIC”) for a fiscal year is calculated based on (i) the net income of that year as presented in the Company’s consolidated statements of operations prepared pursuant to generally accept
Slide 36: Strong Foundation. Stronger Future.
STRONG FOUNDATION. STRONGER FUTURE.
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