Stella-jones Inc. · TSX:SJ
Stella-jones — Investor Presentation (May 2025)
33 slides from Stella-jones's investor presentation, May 2025
Slide 1: Investor Presentation
May 2025 Investor Presentation
Slide 2: Caution Regarding Forward-Looking Information
CAUTION REGARDING FORWARD-LOOKING INFORMATION This presentation contains certain statements that are forward-looking, including comments with respect to the Company's objectives, strategies, targets and expectations. The reader is cautioned not to place undue reliance on these statements since a nu
Slide 3: Stella-Jones At-A-Glance
STELLA-JONES AT-A- GLANCE $3.97B* SJ Market Cap TSX 44 ~70% Wood Treating Facilities 29 U.S. Sales and 15 Canada in the U.S. >3,000 Employees *All $ in this presentation are Canadian dollars, CAD *All amounts are as of December 31, 2024 3
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Leader in ▪ Leading North American manufacturer of products focused on supporting infrastructure that are essential to the delivery of electrical distribution and transmission, and the operation and maintenance of railway transportation systems Infrastructure- ▪ Demand for util
Slide 5: 2024 Product Category Overview
2024 PRODUCT CATEGORY OVERVIEW UTILITY RAILWAY INDUSTRIAL RESIDENTIAL LOGS POLES TIES PRODUCTS LUMBER & LUMBER 49% of Sales 26% of Sales 4% of Sales 18% of Sales 3% of Sales 5
Slide 6: Historical Milestones
HISTORICAL MILESTONES Completed more than 20 acquisitions in the past 20 years Over $1 billion in sales Over $2 billion Over $3 billion Foundation IPO 4 for 1 stock split in sales in sales 1993 1994 2010 2012 2013 2015 2018 2021 2022 Tangent Rail McFarland Cascade: RAM Forest Group & Cahaba: Corpora
Slide 7: Growing Into Steel With Acquisition Of Locweld
GROWING INTO STEEL WITH ACQUISITION OF LOCWELD • Acquired Locweld in May 2025 for a consideration of $58 million • Locweld is a leading manufacturer of electrical transmission lattice towers and steel transmission poles • Based in Candiac, Quebec, with over 75 years of experience and more than 220 e
Slide 8: Addressable North American Transmission And Distribution Market
ADDRESSABLE NORTH AMERICAN TRANSMISSION AND DISTRIBUTION MARKET Opportunity for Stella-Jones to capitalize on growing Transmission & Distribution market, underpinned by a combination of maintenance-driven demand and new projects. TRANSMISSION ADDRESSABLE MARKET DISTRIBUTION ADDRESSABLE MARKET $5.7B
Slide 9: Utility Poles
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Slide 10: Utility Poles: Overview
UTILITY POLES: OVERVIEW ▪ Stella-Jones supplies major electrical utilities and telecommunication companies with wood utility poles across North America ▪ Extensive network of distribution facilities to quickly respond to un-forecasted demand ▪ Treated wood poles preferred because of their durability
Slide 11: Large & Diversified North American Presence
LARGE & DIVERSIFIED NORTH AMERICAN PRESENCE Product Category 28 Treating Facilities Pole Treating Facilities 10 in Canada Finished Goods Yards 18 in U.S. 11
Slide 12: Competitive Strengths
COMPETITIVE STRENGTHS + Robust Procurement Network & Consistent Access Expansive Manufacturing Extensive Broad and Diversified to Wood Fibre Inventory Network Transportation Network Customer Base ▪ Production facilities ▪ Large inventories of ▪ Vast network across ▪ Expansive network of ▪ Hundreds o
Slide 13: Railway Ties
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Slide 14: Railway Ties: Overview
RAILWAY TIES: OVERVIEW Industry leader in the manufacture and distribution of treated wood railway crossties, switch ties, bridge timbers, prefabricated bridges, crossing panels, and pre-plated products Treating capacity, sources of supply and purchasing power to meet the needs of Class 1, Short Lin
Slide 15: Large & Diversified North American Presence
LARGE & DIVERSIFIED NORTH AMERICAN PRESENCE 1. Prince George, BC 2. Delson, QC 11 Treating Facilities 3. Russellville, AR 2 in Canada 4. Alexandria, LA 9 in U.S. 5. Bangor, WI 6. Fulton, KY 7. Winslow, IN 8. Montevallo, AL 9. Clanton, AL 10. Goshen, VA 11. Dubois, PA 15
Slide 16: Competitive Strengths
COMPETITIVE STRENGTHS Established Extensive Manufacturing, Differentiated Robust Customer Distribution & Product Inventory Relationships Procurement Networks Offering Levels ▪ Long-term contracts with Class I ▪ Facilities strategically located ▪ Provides differentiated products: ▪ Robust inventory l
Slide 17: Residential Lumber
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Slide 18: Residential Lumber: Overview
RESIDENTIAL LUMBER: OVERVIEW Stella-Jones manufactures and distributes premium grade residential treated lumber, composite decking products and accessories to Canadian and American retailers 2024 Sales 5-Year Sales 18% $614M of Total Sales 18
Slide 19: Product Category Overview
PRODUCT CATEGORY OVERVIEW Treated Lumber and Distribution Facilities: 6 in Canada and 2 in U.S. Products: Treated Lumber and Wood Accessories, Composite Decking and Complementary Attachments Customers: ~70% Big Box, ~30% Dealer Network 19
Slide 20: Competitive Strengths
COMPETITIVE STRENGTHS Premium-Quality Always Speed to Strong Procurement Dedicated Distribution Products In-Stock Market Team Centres with Exceptional Service and Support ▪ Offers premium grade ▪ Established relationships to ▪ Dedicated logistics team ▪ Unique interconnected ▪ Team works to increase
Slide 21: Environmental, Social And Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE 21
Slide 22: Our ESG Strategy
OUR ESG STRATEGY Click to view our 2023 ESG Report 22
Slide 23: Financial Outlook
FINANCIAL OUTLOOK 23
Slide 24: Track Record Of Sustainable And Profitable Growth
TRACK RECORD OF SUSTAINABLE AND PROFITABLE GROWTH (in millions of dollars) Sales EBITDA $608 $633 $3,319 $3,469 $3,065 $2,750 $448 18.3% 18.2% $2,551 $385 $400 15.1% 14.5% 14.6% 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 ▪ Strong and steady maintenance-driven demand ▪ Sustained strong EBITDA
Slide 25: 2023-2025 Financial Objectives
2023-2025 FINANCIAL OBJECTIVES (in millions of Canadian dollars, except percentages and ratios) 2023-2025 Objectives (1) Sales Approx. $3,600 total EBITDA Margin(2) > 17% Return to Shareholder: cumulative > $500 Net Debt-to-EBITDA(2) (3) 2.0x-2.5x (1) Refer to the 2024 annual MD&A for further detail
Slide 26: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION Net Leverage Target: 2.0x-2.5x 2 1 3 Return to Shareholders Capital Expenditures Target: >$500 million over Acquisitions 2023-2025 Asset maintenance, productivity and Pursue accretive sustainability initiatives Dividends transactions to enhance strategic Target: $75M-$
Slide 27: Acquisition Criteria
ACQUISITION CRITERIA Acquisition opportunities to better serve utility and railroad customers ▪ Continued focus on wood treating ▪ Consideration given to complementary products or services ▪ Subject to strict evaluation criteria ▪ Accretive to margins and returns ▪ Steady revenues and free cash flow
Slide 28: Appendix
APPENDIX eal 28 ‘a
Slide 29: 2024 Financial Highlights
2024 – FINANCIAL HIGHLIGHTS (in millions of Canadian dollars, except per share data and margins) 2024 2023 Sales 3,469 3,319 Operating income 503 499 Operating income margin(1) 14.5% 15.0% EBITDA(1) 633 608 EBITDA Margin(1) 18.2% 18.3% ROCE(1) 13.7% 15.8% Net income 319 326 Earnings per share – basi
Slide 30: Maintaining A Strong Financial Position In 2024
MAINTAINING A STRONG FINANCIAL POSITION IN 2024 $408M 2024 Operating Cashflow New NCIB Return to Inaugural Program Shareholders $400M, 7-Year Commitment Senior Notes $802M • 2.5M shares • Ongoing share • Reflects confidence in authorized repurchases business fundamentals and Available Liquidity • Re
Slide 31: Q1 2025 Financial Performance
Q1 2025 FINANCIAL PERFORMANCE (in millions of Canadian dollars, except per share data and margins) Q1-25 Q1-24 Sales 773 775 Gross Profit(1) 168 172 Gross Profit margin(1) 21.7% 22.2% Operating income 143 124 Operating income margin(1) 18.5% 16.0% EBITDA(1) 179 156 EBITDA Margin(1) 23.2% 20.1% Net i
Slide 32: Disciplined Capital Allocation Strategy
DISCIPLINED CAPITAL ALLOCATION STRATEGY $380M Investment-grade capital allocation strategy allows pursuit of growth Returned to opportunities while returning capital to shareholders. Shareholders out of $500 M committed As at March 31, 2025 Return to Strategic NCIB Program $691M Shareholders Commitm
Slide 33: Stella-Jones
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