Ufp Industries, Inc. · NASDAQ:UFPI
Ufp Industries — Q1 2024 Earnings Presentation
32 slides from Ufp Industries's earnings presentation, Apr 30, 2024
Slide 1: Investor Relations Presentation
INVESTOR RELATIONS PRESENTATION Results through March 30, 2024 Mixed materials structural crate Deckorators Surestone composite decking, ProWood Fencing Commercial wood truss UFP Packaging UFP Retail Solutions UFP Construction
Slide 2: UFP Industries, Inc. forward-looking statements
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 Statement. Just People on a Mission.
The operating segments of UFP Industries – UFP Packaging, UFP Construction and UFP Retail Solutions – manufacture and sell a wide variety of value-added products used in residential and commercial construction, outdoor living, packaging and other industrial applications worldwide. NO MISSION STATEME
Slide 4: UFP at a Glance
UFP AT A GLANCE 1955 15,800+ 219 $7.0B $788.7M Founded in Grand Employees Facilities Q1 2024 TTM Net Q1 2024 TTM Rapids, MI worldwide worldwide Sales Adjusted EBITDA Business segments and markets Based on Q1 2024 TTM Net Sales $2.8B $1.8B Big box, independents, & buying co-ops Industrial manufacture
Slide 5: Where We Are
WHERE WE ARE 1 1 196 1 1 1 9 4 219 5 Locations 9 Countries 5
Slide 6: Business Model Provides Sustainable Competitive Advantages
BUSINESS MODEL PROVIDES SUSTAINABLE COMPETITIVE ADVANTAGES Scale through Incentives Aligned Commitment To Culture Structure Diversification With Shareholders Innovation As North America’s largest Each of our 219 operations Teamwork, accountability, buyer of softwood lumber, While in its early stages
Slide 7: Short-Term Forward Outlook
SHORT-TERM FORWARD OUTLOOK PACKAGING RETAIL Industrial production down mid-single digits based on Market demand down mid-single digits based on forecasts of • Purchasing Managers Index (PMI) • Same-store sales growth of Big Box • Durable goods manufacturing • Home remodeling activity • U.S. real GDP
Slide 8: Long-Term Financial Goals
LONG-TERM FINANCIAL GOALS Earn an incremental Annual unit sales Achieving and return on new Maintain a growth of 7-10% sustaining a 12.5% investment conservative capital including small adjusted greater than our structure acquisitions EBITDA margin hurdle rate 8
Slide 9: Value Added Sales
VALUE ADDED SALES Value-added as a percent of sales Commodity Value-added 68% 69% 64% 63% 60% 40% 36% 37% 32% 31% 2013 2020 2021 2022 2023 Q1 2024 TTM Improved mix raises EBITDA margins and contributes to long-term financial goals. 9
Slide 10: New Products
NEW PRODUCTS Long-term Goal: 10% of Net Sales New Products Definition Changed in 2024 % of Net Sales* % of Net Sales Sunset Sales** 3.3% 3.9% 10.5% 9.9% 9.7% 1.9% 7.9% 7.1% 2020 2021 2022 2023 Q1 2024 TTM *In 2020 thru 2023 new products were defined as those that were in the front half of their life
Slide 11: Innovation and New Products, UFP Venture Fund
INNOVATION AND NEW PRODUCTS UFP VENTURE FUND In 2022 we launched our In 2023 we started the Innovation Accelerator to: UFP Venture Fund to: Spur external growth through Bring new products and services to late-stage development and early-stage market faster commercialization opportunities Empower ent
Slide 12: Business Segments
BUSINESS SEGMENTS Q1 2024 TTM Net Sales Q1 2024 TTM Net Sales Q1 2024 TTM Net Sales Site Built $978 Million ProWood Group Structural Packaging $2.4 Billion $1.2 Billion Factory Built $743 Million Deckorators PalletOne Commercial $2.8B $306 Million $1.8B $526 Million $2.2B $254 Million UFP Edge Prote
Slide 13: Retail Solutions: Treated & Deck Specialties, Fence, Lawn & Garden
TREATED & FENCE, LAWN BUILDING DECK SPECALTIES & GARDEN MATERIALS Wood- and mineral-based Premium siding, Pressure-treated lumber, Wood and vinyl fence, ProWood FR, project panels, composite decking, railing pattern, trim; interior decking, handrail, stairs, planters, garden beds, short boards & dim
Slide 14: Structural Packaging, PalletOne, Protective Packaging
Structural Packaging PalletOne Protective Packaging 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, hardware and
Slide 15: Site-Built, Factory-Built, Commercial, Concrete Forming
Site-Built Factory-Built Commercial Concrete Forming Roof trusses, wall panels, floor Floor, wall and roof panels, cabinet Turnkey project management of Offsite prefabrication of value-add systems and framing services for components, countertops and consumer environment and formwork, aluminum horizo
Slide 16: Sustainability Continuum
SUSTAINABILITY CONTINUUM We believe 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 ESG and maintaining a sustainable enterprise
Slide 17: Financials
FINANCIALS (§) UFP INDUSTRIES
Slide 18: Our Performance
OUR PERFORMANCE Net Sales Adjusted EBITDA Adjusted EBITDA Margin $ in Millions 31% 2020 28% (26)% 94% (3)% 6% 2021 2% (9)% (8)% 36% 2022 $5,154 $8,636 $9,627 $7,218 $7,035 $431 $835 $1,097 $810 $789 8.4% 9.7% 11.4% 11.2% 11.2% Net Earnings (ACI) ROIC Capital Resources 2023 29% Liquidity Q1 2024 117%
Slide 19: Managing Lumber Market Risk
MANAGING LUMBER MARKET RISK 50% 50% Level of lumber prices does 39.9% 39.9% Lumber Market Volatility* Adjusted EBITDA Margin not drive profitability 40% 40% 34.5% Sequential trends impact 30% 30% profit per unit 20% 20% Balanced mix of variable and fixed- 11.4% 11.2% 11.2% 9.7% price products mitiga
Slide 20: Net Sales (in millions)
NET SALES (in millions) UFP Consolidated UFP Retail Solutions $9,627 $3,771 $8,636 $3,535 $7,218 $2,956 $2,823 $7,035 28% $2,234 $5,154 31% 25% 6% 2% 24% 0% 5% (6)% 4% (9)% (8)% (4)% (8)% (1)% (10)% (8)% (3)% (6)% (8)% 2020 2021 2022 2023 Q1 2024 TTM 2020 2021 2022 2023 Q1 2024 TTM UFP Packaging UFP
Slide 21: Adjusted EBITDA (in millions)
ADJUSTED EBITDA (in millions) UFP Consolidated $1,097 UFP Retail Solutions $217 $215 $835 $810 $789 $208 $198 $431 11.4% 11.2% 11.2% $186 9.7% 7.0% 7.6% 8.4% 5.6% 5.8% 8.3% 2020 2021 2022 2023 Q1 2024 TTM 2020 2021 2022 2023 Q1 2024 TTM UFP Packaging $376 UFP Construction $422 $300 $244 $283 $272 $2
Slide 22: Adjusted EBITDA Growth and Unit Sales
ADJUSTED EBITDA GROWTH AND UNIT SALES UFP Consolidated UFP Retail Solutions 100% 94% 160% 127% 80% 120% Percent Growth Percent Growth 60% 36% 28% 80% 40% 31% 31% 20% 6% 2% 40% (3)% 10% (4)% 3% 0% (9)% 25% 0% 6% -20% (8)% 0% (6)% (8)% (26)% -40% -40% 2020 2021 2022 2023 Q1 2024 2020 2021 2022 2023 Q1
Slide 23: 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 $250-300M in 2024 Capex Share Buyback Dividends Opportunistic share repurchases and OCF to offset issuances. Curren
Slide 24: Return on Invested Capital
RETURN ON INVESTED CAPITAL 40% 34.6% 35% 31.9% 30% 25% 22.2% 20.9% Percent 19.6% 20% 15% Hurdle Rate = 15% 10% WACC = 10% 5% 0% 2020 2021 2022 2023 Q1 2024 TTM Long-Term Goal: Earn an incremental return on new investment greater than our hurdle rate Non-GAAP Financial Information: Please visit ufpin
Slide 25: Cash Cycle
CASH CYCLE 80 70 64* 64* 63 62 60 56* Days 50 40 30 20 10 0 2020 2021 2022 2023 Q1 2024 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 outs
Slide 26: Recent Acquisitions
26 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 commodi
Slide 27: 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% 0.0% 0.0% 0.0% - 0.1 - - - 0.0% 0% 0.0 2020 2021 2022 2023 Q1 2024 2020 2021 2022 2023 Q1 2024 Net Debt to Total Capi
Slide 28: Stock Performance
STOCK PERFORMANCE Long-term returns on UFPI stock are consistently above the proxy peers and major market indices Annualized Stock Return 60% 50% 52.5% 48.7% 40% Annual % Return 26.4% 30% 22.6% 21.9% 20.3% 20% 13.9% 16.2% 13.9% 11.8% 8.4% 11.7% 9.6% 10.5% 10% 7.9% 6.7% 7.6% 12.1% 8.7% 6.5% 6.0% 6.8%
Slide 29: Quarterly Results
QUARTERLY RESULTS (§) UFP INDUSTRIES
Slide 30: Net Sales Q1 2024 (in millions)
NET SALES Q1 2024 (in millions) UFP Consolidated UFP Retail Solutions $939 $2,044 $1,822 $1,828 $761 $730 $1,524 $1,639 (1)% 0% $629 (2)% $526 0% (7)% (8)%* (7)% (8)% (1)% (2)% (9)% (10)% (7)% (8)%* (8)% (18)% (8)% (9)% (11)% (18)% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2
Slide 31: Adjusted EBITDA Q1 2024 (in millions)
ADJUSTED EBITDA Q1 2024 (in millions) UFP Consolidated UFP Retail Solutions $234 $69 $202 $208 $181 $56 $55 $166 $49 11.5% $35 11.4% 11.1% 7.6% 8.8% 10.9% 11.0% 6.4% 7.4% 6.6% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 UFP Packaging UFP Construction $67 $69 $77 $
Slide 32: Thank You
THANK YOU 2801 E. Beltline Ave. NE Grand Rapids, MI 49506 (800) 598-9663 - UFPI.com 32