Ufp Industries, Inc. · NASDAQ:UFPI
Ufp Industries — Investor Presentation (November 2022)
32 slides from Ufp Industries's investor presentation, Nov 15, 2022
Slide 1: 2022 Investor Relations Presentation
1 2022 Investor Relations Presentation 2022 Investor Relations Presentation Results through September 24, 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 themeaning of Section 21E of the Securities Exchange Act, as amended, and are based on management’s beliefs, assumptions, current expectations, est
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 appli
Slide 4: UFP at a Glance
4 40% 31% 24% 5% Based on 2021 Net Sales INTRODUCTION UFP AT A GLANCE Retail -$3.4B in 2021 $3.7B in Q3 2022 TTM Big box, independents, & buying co-ops Construction -$2.7B in 2021 $3.2B in Q3 2022 TTM Single and multi-family builders, commercial builders, concrete formers, factory-built housing (mob
Slide 5: Where We Are: 2022 Locations
5 INTRODUCTION WHERE WE ARE 2022 186 2 4 1 11 1 5 211 Locations 1
Slide 6: Long-Term Financial Goals
6 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
Slide 7: Innovation and New Products
7 BUSINESS MODEL INNOVATION AND NEW PRODUCTS 2013 $426m 3% 10% $85m New Products 2022 10% $540m % of Sales Sales % of Sales Sales % of Sales Sales $842m 10% % of Sales Sales 20192021 20132020 $679m % of Sales Sales Q3 2022 TTM 7% 4%* $377m* *This represents the new product sales, while still sold, t
Slide 8: New Structure Drives Better Strategy Development and Execution
8 New Structure Drives Better Strategy Development and Execution Western Division Southern Division Northern Division 2020 and Beyond 1955 -20192020 and Beyond Our new structure, based on management of market segments rather than geography, brought greater focus, resulting in: • Improved alignment w
Slide 9: A Unique Culture Built for Good Times and Bad
9 BUSINESS MODEL A UNIQUE CULTURE BUILT FOR GOOD TIMES AND BAD 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 employees b
Slide 10: UFP Industries Business Segments
10 UFP INDUSTRIES BUSINESS SEGMENTS 2022
Slide 11: Business Segments: Retail Solutions Sales
11 BUSINESS SEGMENTS 2022 2013 Value-added as a % of Net Sales 2013 $284m 19% 15% $402m $510m 19% Sales % of Sales Commodity Value-added 201920202021 58% 42% 46% 43% 57% 54% Sunbelt $774M 2021 DecKorators** $249M 2021 UFP Edge*** $545M 2021 Prowood* $1.7B 2021 *Includes $393M and $403M in Outdoor Es
Slide 12: Business Segments: Retail Solutions
12 Deckorators.com BUSINESS SEGMENTS RETAIL SOLUTIONS ProWoodLumber.com OutdoorEssentialProducts.com UFPEdge.com Outdoor lifestyle products including wood and vinyl fencing, landscape and garden décor, picnic tables, pergolas, trellises and more. Premium siding, pattern, trim; interior accent wall p
Slide 13: Business Segments: Industrial Sales
13 2022 2013 $69m 6% New Products & % of Net Sales 8% $73m $177m 7% Sales % of Sales 2013 35% 66% 34% 68% 32% 65% Commodity Value-added Value-added as a % of Net Sales UFPindustial.com Protective Packaging Materials $19M 2021 Structural Packaging and OEM Components $1.8B 2021 Q3 2022 TTM: $1.9B Q3 2
Slide 14: Business Segments: Industrial
14 BUSINESS SEGMENTS INDUSTRIAL Corrugated, stretch/shrink films, labels, machine applicators, facility supplies, hardware and software solutions for all industries. PROTECTIVE PACKAGING Wood, steel, foam and corrugated for mixed material crates and specialty containers. Hard cases, tracking technol
Slide 15: Business Segments: Construction Sales
15 BUSINESS SEGMENTS 2022 2013 $140m $60m 4% 5% $54m $136m 3% Sales % of Sales 2013 24% 81% 19% 73% 27% 76% Commodity Value-added Value-added as a % of Net Sales Factory-Built $1.1B 2021 Commercial $259M 2021 Concrete Forming $150M 2021 Site-Built* $1.2B 2021 Q3 2022 TTM: $1.4B Q3 2022 TTM: $1.2B Q3
Slide 16: Business Segments: Construction
16 Roof trusses, wall panels, floor systems, doors and framing services for residential and light commercial builders. Sales are 65% single family, 35% multifamily. Roof trusses, floor joists, laminated wall panels, cabinet components, countertops and milled components for modular and manufactured h
Slide 17: Business Segments: International
17 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 18: Sustainability Continuum
18 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 19: Our Sustainability Philosophy
19 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 sustaina
Slide 20: Financials
UFP INDUSTRIES FINANCIALS
Slide 21: Our Performance
21 OUR PERFORMANCE 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% 34.9% 2019 2020 2021 Unit sales growth rate 6% 6% 6% 6% 28% 28% 6% 6% 28% $ Sales in Millions Growth rate 21% 37% 117% $31
Slide 22: Managing Lumber Market Risk
22 MANAGING LUMBER MARKET RISK Level of lumber prices does not drive profitability Sequential trends impact profit per unit Balanced mix of variable and fixed-price products mitigate risk Adjusted EBITA Margin Lumber Market Volatility* 4.2% 34.5% 39.9% 32.2% 7.2% 8.4% 9.7% 11.5% 0% 5% 10% 15% 20% 25
Slide 23: Net Sales
23 FINANCIALS 2022 NET SALES (in millions) Long-Term Goal: Unit sales growth of 5% to 7%, including small acquisitions Net Sales Percent Change $4,416 $5,154 $8,636 $9,730 6% 6% 28% 9% 5% 5% 4% 2% 0% 10% 20% 30% 40% 50% 60% $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 Organic Unit Sales Growth Tot
Slide 24: Adjusted EBITDA
24 UFP Consolidated UFP Industrial UFP Retail Solutions UFP Construction FINANCIALS ADJUSTED EBITDA (in millions) 2022 Non-GAAP Financial Information: Please click herefor reconciliation to related GAAP measurement. Adjusted EBITDA Adjusted EBITDA Margin Adjusted EBITDA Margin Adjusted EBITDA $317 $
Slide 25: Adjusted EBITDA Growth and Unit Sales
25 UFP Consolidated UFP Industrial UFP Retail Solutions FINANCIALS ADJUSTED EBITDA GROWTH AND UNIT SALES 2022 Percent Growth 6% 6% 28% 9% 19% 36% 94% 32% 0% 20% 40% 60% 80% 100% 201920202021Q3 2022 TTM Unit Sales Growth Adjusted EBITDA Growth Long-Term Goal: Achieve Adjusted EBITDA growth exceeding
Slide 26: Return on Invested Capital
26 FINANCIALS RETURN ON INVESTED CAPITAL Hurdle Rate = 12% Percent 13.2% 14.0% 15.1% 21.0% 32.2% 34.9% 0% 5% 10% 15% 20% 25% 30% 35% 40% 20172018201920202021Q3 2022 TTM Long-Term Goal: Earn an incremental return on new investment over our WACC WACC = 10% 2022 Non-GAAP Financial Information: Please c
Slide 27: Cash Cycle
27 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 53.1 0 10 20 30 40 50 60 70 20172018201920202021Q3 2022 YTD
Slide 28: Capital Structure
28 FINANCIALS CAPITAL STRUCTURE Percent Net Debt to Total Capitalization vs Maximum Target Net Debt to Adjusted EBITDA vs Maximum Target 12.8% 15.7% 0.0% 0.0% 2.5% 0.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 20172018201920202021Q3 2022 TTM 0.60 0.80 - - 0.06 - 0.0 0.5 1.0 1.5 2.0 2.5 2017201820192020
Slide 29: Balanced Use of Free Cash Flow
29 BALANCED USE OF FREE CASH FLOW Acquisitions to contribute half of our total annual unit sales growth CapExplan of $175M to $225M in 2022 Opportunistic share repurchases to offset issuances Increasing dividends $349 $336 $512 $533 $25 $31 $40 $43 $29 $93 $85 $89 $151 $114 $39 $65 $476 $105 Acquisi
Slide 30: Net Sales Q3 2022
30 FINANCIALS 2022 NET SALESQ3 2022 (in millions) $2,017 $2,489 $2,901 $2,323 Q4 2021Q1 2022Q2 2022Q3 2022 UFP Consolidated Organic Unit Sales YOY Growth Total Unit Sales YOY Growth Net Sales $704 $993 $1,121 $845 Q4 2021Q1 2022Q2 2022Q3 2022 UFP Retail Solutions $515 $611 $676 $585 Q4 2021Q1 2022Q2
Slide 31: Adjusted EBITDA Q3 2022
31 FINANCIALS 2022 ADJUSTED EBITDAQ3 2022 (in millions) $2.9 $2.0 $2.1 $223 $292 $319 $274 Q4 2021Q1 2022Q2 2022Q3 2022 UFP Consolidated Adjusted EBITDA Margin Adjusted EBITDA $2.9 $2.0 $2.1 $43 $78 $31 $36 Q4 2021Q1 2022Q2 2022Q3 2022 UFP Retail Solutions $2.9 $2.0 $2.1 $87 $92 $105 $90 Q4 2021Q1 2
Slide 32: Thank You
32 2801 E. Beltline Ave. NE Grand Rapids, MI 49506 (800) 598-9663 -UFPI.com THANK YOU.
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