Simpson Manufacturing Company, Inc. · NYSE:SSD
Simpson Manufacturing — Investor Presentation (August 2020)
27 slides from Simpson Manufacturing's investor presentation, Aug 5, 2020
Slide 1: Strength Built In
Karen Colonias CEO Brian Magstadt CFO STRENGTH BUILT IN August | 2020
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 2 IE of the Securities Exchange Act of 1934, as amended. Forward-looking statements general
Slide 3: Investment Highlights
Investment Highlights Industry leader with unique business model, strong brand recognition and trusted reputation Diversified product offerings and geographies mitigates exposure to cyclical U.S. housing market Leadership position in wood products with significant opportunities in all addressable ma
Slide 4: Company Overview
Company Overview Simpson Manufacturing Co. designs, engineers and manufactures structural connectors, anchors, fasteners, software solutions and other products for new construction, repair and remodel, and do-it-yourself markets Key Facts and Figures Unique Business Model … • Ticker: NYSE:SSD • Simp
Slide 5: Products for Construction
Products for Construction 303 56 659 128 186 Engineers Engineering & Patents & Patents Code Reports Lab Technicians Trademarks Pending Wood Construction Products • Produce and market over 10,000 standard and custom products • Typically made of steel and are used primarily to strengthen, support and
Slide 6: Products for Construction (continued)
Products for Construction (continued) Concrete Construction Products • Produce and market over 1,000 standard and custom products • Composed of various materials including steel, chemicals and carbon fiber used to anchor, protect and strengthen concrete SAMPLE PRODUCT LINES: Powder-actuated tools, m
Slide 7: Addressable Market Opportunity
Addressable Market Opportunity(1) Addressable Market $1.3 B (9%) $5.8 B Addressable Market $730 M (13%) $15.0 B $1.5 B Addressable Market: $1.5 B (100%) Fasteners (Addressable) Concrete (Addressable) Wood Connectors & Truss (Addressable) (1) Note: Market sizes and market shares based on internal est
Slide 8: Simpson's Share of Addressable Market
Simpson’s Share of Addressable Market(1) SSD’s Share $187 M (14%) SSD’s Share $730 M $161 M (22%) $1.3 B $1.5 B SSD’s Share $786 M (52%) Fasteners (SSD Share) Concrete (SSD Share) Wood Connectors & Truss (SSD Share) (1) Note: Market share based on net sales as of the full year ended December 31, 201
Slide 9: Net Sales Correlation to U.S. Housing Starts
Net Sales Correlation to U.S. Housing Starts Our investments in adjacent products and markets have helped mitigate our exposure to a cyclical U.S. housing market over time… $1,200 2.0 $1,100 1.8 $1,000 1.6 $900 1.4 (M) Starts Housing $800 $700 1.2 $600 1.0 ($M) $500 0.8 $400 0.6 $300 0.4 $200 $100 0
Slide 10: Strategic Growth Initiatives
Strategic Growth Initiatives Rationale …while also allowing us to provide a complete product solution to our customers and to improve sales and margins in our core wood connector business. EUROPE CONCRETE SOFTWARE • Attractive opportunity to • Sharpening focus on • Supports retaining our grow wood c
Slide 11: Simpson Strong-Tie Software Strategy
Simpson Strong-Tie Software Strategy Over 40% of our core wood connector sales are to customers with software needs Design Input Estimation Workflow Output Simpson’s Proprietary Bill of Back-Office Web 2D / 3D Software Pipeline Material Systems Apps Takeoffs Simpson Hyphen LotSpec Truss Studio Optio
Slide 12: Competitive Advantages
Competitive Advantages Aside from our strong brand recognition and trusted reputation, Simpson is unique due to: • Strong customer support and education for engineers, builders, contractors and code officials • Provide on-site customer installation training and support • Extensive product testing ca
Slide 13: Operating Income Margin Outperformance
Operating Income Margin Outperformance Simpson Historical Operating Income Margin Versus Proxy Peer Average(1) 25.0% 19.9% 20.0% 16.4% 15.1% 14.1% 16.0% 13.7% 14.1% 13.8% 15.9% 15.0% 13.2% 13.3% 12.3% 12.0% 11.6% 9.4% 9.9% 12.6% 11.5% 10.0% 7.8% 9.5% 6.0% 5.9% 5.4% 5.0% 3.7% 3.8% 0.0% 1.1% (2.7%) (5
Slide 14: Strong Business Drives Stockholder Value
Strong Business Drives Stockholder Value From 2010 – 2019, Simpson has grown EPS by 414% and increased its annual dividend by 118% Our 2019 Sales by Product… EPS(1) ($ USD Millions) $2.98 $2.72 Concrete Construction $1.94 $187 $1.86 $1.29 $1.38 $1.04 $1.05 $0.87 Wood $0.58 Construction $949 2010 201
Slide 15: Q2 2020 Highlights
Q2 2020 Highlights PERFORMANCE SUMMARY • Solid net sales of $326.1 million increased 7.0% year-over-year • Higher demand associated with initial product rollout to Lowe’s, a returning home center customer • Improved sales in the repair and remodel market due to shift in consumer behavior towards hom
Slide 16: Strong Balance Sheet & Liquidity Position
Strong Balance Sheet & Liquidity Position Key financial metrics for the six months ended June 30, 2020: • Strong balance sheet and ample liquidity to maintain day-to-day operations $315 M CASH AND CASH EQUIVALENTS • Focus on effective working capital management $43 M CASH FLOW FROM OPERATIONS and pr
Slide 17: Disciplined Capital Allocation Strategy
Disciplined Capital Allocation Strategy Simpson has returned 83% of cash flow from operations returned to stockholders since 2017(1) through both dividends and repurchases of its common stock Cash Flow from • Improve cash flow through better management of working capital and Operations overall balan
Slide 18: Thoughtful Deployment of Capital
Thoughtful Deployment of Capital Since 2017(1) we have… • Increased our quarterly dividend by approximately 12% • Repurchased more than $304 million in shares, including a record $111 million in fiscal 2018 …resulting in returns of our cash flow from operations to stockholders of approximately 83% C
Slide 19: 3-Year Relative Price Performance
3-Year Relative Price Performance Recent stock price performance reflects clarity surrounding business strategy and durability, growth prospects and operational efficiencies SSD: +118% Proxy Peers: +91% S&P 500: +32% DJUSBM: +26% Simpson Manufacturing Co., Inc. DJ US TM/Building Materials & Fixtures
Slide 20: Robust Sustainability Programs
Robust Sustainability Programs We believe in doing what’s right for our people, customers and community Environmental Efforts Social Programs Manufacturing Process Employee Involvement Our value engineering process optimizes design while Our employees dedicate hundreds of volunteer hours each maximi
Slide 21: Appendix
APPENDIX
Slide 22: Wood Construction — Product Spotlight: Outdoor Accents
Wood Construction — Product Spotlight Outdoor Accents® Decorative Hardware • Outdoor Accents wood connectors and fasteners offer decorative appeal and structural strength to outdoor living areas such as pergolas, gazebos and patio covers • The hardware accommodates various lumber sizes, providing fl
Slide 23: Wood Construction — Product Spotlight: Truss Products
Wood Construction — Product Spotlight Truss Products Truss Software • Truss plates are made from light-gauge • Our truss software supports our core wood product galvanized steel and are pressed into lumber to offering by providing a complete system join wood members together, which create a • Our Co
Slide 24: Concrete Construction — Product Spotlight: Mechanical Anchors
Concrete Construction — Product Spotlight Mechanical Anchors • Our mechanical anchors are designed to install easily and securely into a variety of base materials — including concrete, brick and stone • For applications where there is a risk of concrete cracking, specific anchors have been designed
Slide 25: Software Critical to Preserve & Grow Core Business
Software Critical to Preserve & Grow Core Business Technology strengthens our value proposition as the industry trusted partner in construction solutions and building software systems. INVESTMENTS IN SOFTWARE Acquired CG Visions (January 2017) Proprietary Truss Software • Provides expertise and reso
Slide 26: Track Record of Stockholder Engagement and Responsiveness
Track Record of Stockholder Engagement and Responsiveness • Members of our management and Board engaged with stockholders, representing ~51% of our shares, regarding compensation and governance topics, which resulted in the following changes: Introduced long-term incentive award with three year re
Slide 27: Simpson's People Make the Difference
SIMPSON’S PEOPLE MAKE THE DIFFERENCE simpsonmfg.com/financials 27
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