Slide 1: Investor Relations Presentation
Investor Relations Presentation Results through July 1, 2023
Slide 2: Forward-looking statements and non-GAAP information
UFP INDUSTRIES, INC. 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, estimates,
Slide 3: No mission statements. Just people on a mission.
The operating segments of UFP Industries – UFP Packaging, 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 applications worldwide. NO MIS
Slide 4: UFP at a Glance
UFP AT A GLANCE 1955 15,000+ 221 $9.6B $1.1B Founded in Grand Employees Facilities 2022 Net Sales 2022 Adj. EBITDA Rapids, MI worldwide worldwide Business segments and markets $3.7B in 2022 $2.4B in 2022 Big box, independents, & buying co-ops Industrial manufacturers, OEM’s, agricultural and 39% log
Slide 5: Where We Are
WHERE WE ARE 1 2 197 2 1 9 4 221 5 Locations 8 Countries
Slide 6: Unique business model provides sustainable competitive advantages
UNIQUE BUSINESS MODEL PROVIDES SUSTAINABLE COMPETITIVE ADVANTAGES Balanced Incentives Aligned Commitment To Culture Business Model With Shareholders Innovation As North America’s largest buyer of Each of our 220+ operations is a While in its early stages, a Teamwork, accountability, softwood lumber,
Slide 7: Long-Term Financial Goals
LONG-TERM FINANCIAL GOALS Annual unit sales Earn incremental Minimum 10% Maintain a growth of 5-7%, return on new adjusted conservative capital including small investment EBITDA margin structure acquisitions greater than WACC
Slide 8: Short-Term Forward Outlook
SHORT-TERM FORWARD OUTLOOK RETAIL PACKAGING CONSTRUCTION Based on data such as same-store sales Data from several metrics, including the growth of national home improvement Consensus estimates of housing starts call Purchasing Managers Index (PMI), retailers and forecasts of home for a 12%-15% decli
Slide 9: Value Added Sales
VALUE ADDED SALES Commodity Value-added as a percent of sales Value-added 69% 68% 64% 63% 60% 40% 36% 37% 31% 32% 2013 2019 2020 2021 2022 Q2 2023 YTD . 2022
Slide 10: Innovation and New Products
INNOVATION AND NEW PRODUCTS Net Sales New Products $379m % of Sales Sunset Sales* $842m $736m $540m $153m $426m 4% $353m 5% 10% 10% 10% 8% 9% 2019 2020 2021 2022 Q2 2023 YTD *This represents new product sales that were excluded because they no longer meet our definition of new products. New products
Slide 11: UFP Venture Fund
INNOVATION AND NEW PRODUCTS UFP VENTURE FUND In 2022 we launched our In 2023 we started the UFP Innovation Accelerator to: Venture Fund to: Spur external growth through Bring new products and services to market late-stage development and early-stage faster commercialization opportunities Empower ent
Slide 12: New Structure Drives Better Strategy, Development and Execution
New Structure Drives Better Strategy, Development and Execution 1955 - 2019 2020 and Beyond Western Division Northern Division Southern Division Our new structure, based on management of market segments rather than geography, brought greater focus, effecting: • Improved alignment with our customers
Slide 13: Recent Acquisitions
RECENT ACQUISITIONS Process Purpose Goal Identify attractive growth runways in Find new products and services to Achieve scale and synergy targets to each Business Unit under each Business speed our transformation from optimize growth, margins and returns. Segment and identify gaps in our commodity
Slide 14: Business Segments
BUSINESS SEGMENTS &) ure RETAIL SOLUTIONS @) ure PACKAGING &) urp CONSTRUCTION
Slide 15: UFP Retail Solutions
New Products & % of Net Sales Prowood Group Value-added as a % of Net Sales Net Sales $3.2B 2022 Commodity % of Sales $300m Value-added Sunset Sales* $510m 58% $402m 54% 57% 55% DecKorators 46% 42% 43% 45% $284m $307m $326M 2022 19% 19% 15% 8% 8% UFP Edge $168M 2022 2019 2020 2021 2022 2019 2020 202
Slide 16: On-trend brands to all major building products retailers
Pressure-treated decking, Outdoor lifestyle products including The industry’s leading Premium siding, pattern, trim; timbers, panels and wood and vinyl fencing, landscape and innovator of composite interior accent wall products construction materials, garden décor, picnic tables, pergolas, decking,
Slide 17: UFP Packaging
New Products & % of Net Sales Value-added as a % of Net Sales Net Sales Structural Packaging Commodity % of Sales $31m $1.9B 2022 Value-added $278m 72% Sunset Sales* 66% 68% 65% $177m PalletOne 1% $399M 2022 34% 35% 32% 12% 28% 8% $69m 6% $73m 7% Protective Packaging Solutions 2019 2020 2021 2022 $5
Slide 18: Structural Packaging, PalletOne, Protective Packaging Solutions
PROTECTIVE PACKAGING STRUCTURAL PACKAGING PALLETONE SOLUTIONS Wood, steel, foam and corrugated for mixed material crates Machine-built pallets, design, Corrugated conversion, stretch/shrink films, labels, and specialty containers. Hard cases, lumber processing, engineering and testing strapping, har
Slide 19: UFP Construction
New Products & % of Net Sales Site-Built Value-added as a % of Net Sales Net Sales $1.4B 2022 Commodity % of Sales $28m Value-added $148m 81% Factory-Built Sunset Sales* $136m 76% 77% 73% $1.2B 2022 $60m 1% Commercial $54m 5% 5% 27% 4% 3% $336M 2022 19% 24% 23% Concrete Forming 2019 2020 2021 2022 $
Slide 20: Site-Built, Factory-Built, Commercial, Concrete Forming
CONCRETE SITE-BUILT FACTORY-BUILT COMMERCIAL FORMING Roof trusses, wall panels, floor Roof trusses, floor joists, laminated Turnkey project management of systems, doors and framing wall panels, cabinet components, consumer environment and Lumber and panels; designed, services for residential and lig
Slide 21: International operations: lumber trading and industrial packaging
Lumber trading in 65 countries. Industrial packaging solutions manufacturing in Australia, Mexico, Canada, Italy and India. 2022 Net Sales: $409 million
Slide 22: Sustainability Continuum
SUSTAINABILITY CONTINUUM For UFP, sustainability means more than using and selling renewable materials. It serves our ultimate goal of creating and sustaining value for shareholders. Cultivate a unique, Drive rewarding operational Maintain Provide culture excellence inclusive, safe significant throu
Slide 23: Our Sustainability Philosophy
OUR SUSTAINABILITY PHILOSOPHY For UFP Industries, doing right doesn’t require departments and We believe profitability, asset values and shareholder return are titles, but is simply part of who we’ve been and who we continue optimized by acting responsibly, and that our investors to be. And that’s h
Slide 24: Financials
FINANCIALS @§) UFP INDUSTRIES
Slide 25: Our Performance
OUR PERFORMANCE Net Sales Adjusted EBITDA Adjusted EBITDA Margin $ Sales in Millions 31% 28% 2019 94% 6% 6% 2% 36% 2020 19% $4,416 $5,154 $8,636 $9,627 $317 $431 $835 $1,097 7.2% 8.4% 9.7% 11.4% 2021 Net Earnings (ACI) ROIC Net Debt to Adjusted EBITDA 2022 29% 117% Unit sales growth rate 37% Growth
Slide 26: Managing Lumber Market Risk
MANAGING LUMBER MARKET RISK 50% 50% Level of lumber prices does 39.9% 39.9% Lumber Market Volatility* not drive profitability 40% 40% Adjusted EBITDA Margin 34.5% Sequential trends impact 30% 30% profit per unit 20% 20% 11.4% Balanced mix of variable and fixed- 9.7% 11.3% 8.4% price products mitigat
Slide 27: Net Sales
NET SALES (in millions) UFP Consolidated UFP Retail Solutions $12,000 55% $4,500 80% $10,000 $9,627 45% $3,750 $3,651 65% $3,418 $8,636 Percent Change Percent Change $8,000 28% 35% $3,000 50% Net Sales Net Sales $2,167 31% $6,000 $5,154 25% $2,250 35% $4,416 25% $1,499 $4,000 15% $1,500 24% 20% 6% 6
Slide 28: Adjusted EBITDA
ADJUSTED EBITDA (in millions) UFP Consolidated UFP Retail Solutions $1,200 18% $250 12% $1,097 16% Adjusted EBITDA Margin Adjusted EBITDA Margin $1,000 $200 $180 10% $835 $170 Adjusted EBITDA Adjusted EBITDA 14% $800 $151 12% $150 8% $600 $431 11.4% 10% $100 7.8% 6% $400 $75 $317 9.7% 8% 8.4% $50 5.
Slide 29: Adjusted EBITDA Growth and Unit Sales
ADJUSTED EBITDA GROWTH AND UNIT SALES UFP Consolidated UFP Retail Solutions 100% 160% 127% 80% 94% 110% Percent Growth Percent Growth 60% 60% 36% 25% 31% 40% 28% 19% 31% 18% 19% 10% (11)% 20% 10% 6% 6% 2% 0% 0% -40% 2019 2020 2021 2022 2019 2020 2021 2022 UFP Packaging UFP Construction 220% 180% 180
Slide 30: Return on Invested Capital
RETURN ON INVESTED CAPITAL 40% 34.6% 35% 32.2% 30% 25% 21.0% Percent 20% Hurdle Rate = 20% 15.1% 15% 10% WACC = 10% 5% 0% 2019 2020 2021 2022 Long-Term Goal: Earn an incremental return on new investment over our WACC Non-GAAP Financial Information: Please visit ufpinvestor.com for reconciliation to
Slide 31: Cash Cycle
CASH CYCLE 80 70 65* 64* 64* 62 60 56* 50 Days 40 30 20 10 0 2019 2020 2021 2022 Q2 2023 YTD Cash Cycle = Days Receivables Outstanding + Days Supply of Inventory – Days Payables Outstanding Strong working capital management * Within the cash cycle, we’ve modified our calculation of days payables out
Slide 32: Balanced Use of Free Cash Flow
BALANCED USE OF FREE CASH FLOW Acquisitions to contribute Operating Cash Flow and Capital Allocation half of our total annual (in millions) unit sales growth Acquisitions CapEx plan of $175m to $200M in 2023 Capex Share Buyback Dividends Opportunistic share repurchases and OCF to offset issuances $4
Slide 33: Capital Structure
CAPITAL STRUCTURE Net Debt to Total Capitalization Net Debt to Adjusted EBITDA vs Maximum Target vs Maximum Target 45% 2.5 40% 35% 2.0 30% 1.5 Percent 25% 20% 1.0 15% 10% 0.5 2.5% 5% 0.1 0.0% 0.0% 0.0% 0.0% - - - - 0% 0.0 2019 2020 2021 2022 Q2 2023 2019 2020 2021 2022 Q2 2023 Net Debt to Total Capi
Slide 34: Net Sales Q2 2023
NET SALES Q2 2023 (in millions) UFP Consolidated UFP Retail Solutions $2,901 $1,121 $2,323 $920 $2,044 $845 5% $1,914 $1,822 $691 $750 3% 6% 2% 0% 3% (2)% (6)% 3% (7)% (8)% (2)% 0% (9)% (9)% (10)% (8)% (8)% (7)% (11)% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 UF
Slide 35: Adjusted EBITDA Q2 2023
ADJUSTED EBITDA Q2 2023 (in millions) UFP Consolidated UFP Retail Solutions $319 $69 $274 $234 $49 $213 $202 11.8% $36 $34 $31 7.5% 11.5% 6.6% 4.2% 5.0% 11.0% 11.1% 11.1% 2.8% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 UFP Packaging UFP Construction $105 $138 $90
Slide 36: Stock Performance
STOCK PERFORMANCE Annualized Stock Return 40% 38.0% 35% 30% 23.8% 23.1% 25% 18.5% Annual % Return 20% 16.2% 14.3% 15% 13.3% 9.5% 10.3% 10.4% 9.0% 8.2% 9.6% 10% 8.0% 8.5% 8.7% 7.5% 5% 8.1% 6.7% 7.0% 0% 1 Year 5 Year 10 Year 20 Year UFPI S&P500 DJIA Russell 2000 Proxy Peer Average Peers include MAS, B
Slide 37: Thank You
THANK YOU 2801 E. Beltline Ave. NE Grand Rapids, MI 49506 (800) 598-9663 - UFPI.com