Installed Building Products, Inc. · NYSE:IBP
Installed Building Products — Q3 2023 Earnings Presentation
29 slides from Installed Building Products's earnings presentation, Nov 8, 2023
Slide 1: Installed Building Products 3Q 2023
INSTALLED BUILDING PRODUCTS 3Q 2023 Reported November 8, 2023
Slide 2: Safe Harbor
Safe Harbor This presentation contains "forward-looking statements" as defined under U.S. federal securities laws. Forward -looking statements are generally identified by the use of the words "will," "may," "believes," "expects," "forecast," "intends," "anticipates," "projects," "outlook," "target,"
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes the following non-GAAP financial measures: (1) Adjusted EBITDA and Adjusted EBITDA Margin, (2) Adjusted Net Income, (3) Adjusted Net Income per diluted share, (4) Adjusted Selling Administrative (S&A), (5) Adjusted Cost of Sales, (6) Adjusted Gr
Slide 4: Company Overview
Company Overview
Slide 5: National Scale
National Scale STRONG LOCAL PRESENCE + NATIONAL SCALE = HIGH QUALITY SERVICE WITH OPERATING LEVERAGE • One of the nation’s largest1 new residential insulation installers • Diversified installer of complementary building products for residential and commercial builders • National platform of over 240
Slide 6: IBP Growth Strategy
IBP Growth Strategy CAPITALIZE ON NEW RESIDENTIAL AND COMMERCIAL CONSTRUCTION MARKETS IN INSTALLATION SEGMENT Three Months Ended September 30, 2023 • Accretive acquisitions in primary residential Residential new construction $ 518,080 73 % end market GEOGRAPHIC Repair and remodel 37,839 6% Commercia
Slide 7: Growth Focused Capital Allocation Strategy
Growth Focused Capital Allocation Strategy CAPITAL AND CASH FLOW PRIORITIES CAPITAL ALLOCATION (in thousands) Acquisitions are Primary Use of Capital • Acquisitions contribute to profitability in year one • Disciplined approach generates compelling IRR • Assists with revenue diversification Recent D
Slide 8: Successful Acquisition Strategy
Successful Acquisition Strategy LONG-TERM STRATEGY OF PURSUING VALUE-ENHANCING STRATEGIC ACQUISITIONS Consistently Deploying Capital Across Nearly Three • Acquisition rationale Decades, Driving Growth and Market Expansion ‒ Expand scale, product diversification, market presence Great Financial Crisi
Slide 9: Annual Operating Framework
Annual Operating Framework COMPELLING FINANCIAL MODEL CREATES LONG-TERM VALUE 2018-2022 Long-Term Outlook Acquisition Growth Assumptions Outperform U.S. Organic Revenue Residential Target >$100M of acquired Growth 5-25% Completions Growth revenue annually Stable within Material purchasing power + Gr
Slide 10: Benefits of a Unique Value Chain Structure
Benefits of a Unique Value Chain Structure SCALE PROVIDES A DIRECT LINK BETWEEN MANUFACTURERS AND BUILDERS, A STREAMLINED VALUE CHAIN INSULATION VALUE CHAIN TYPICAL VALUE CHAIN COMPANY OVERVIEW 10
Slide 11: Diverse Service and Product Offering
Diverse Service and Product Offering FRAGMENTED NON-INSULATION PRODUCT MARKET ALLOWS FOR REVENUE DIVERSIFICATION AND ACQUISITIONS SHOWER DOORS, COMMERCIAL INSULATION CLOSET SHELVING GARAGE DOORS RAIN GUTTERS WINDOW BLINDS MIRRORS, HARDWARE PRODUCTS Single Digit ~30% Share NA ~7% Share ~2% Share ~6%
Slide 12: Diversification Growth Opportunity
Diversification Growth Opportunity FURTHER DIVERSIFICATION ENHANCES SAME BRANCH REVENUE OPPORTUNITY Top 50 IBP Metropolitan Statistical Areas (MSAs) End Products End Markets Core Installed End Products Core End Markets • Fiberglass insulation • New single-family • Spray foam insulation • New multi-f
Slide 13: ESG Highlights
ESG Highlights CLICK HERE TO VIEW ESG REPORT
Slide 14: Environmental
Environmental OUR BUSINESS IS COMMITTED TO SUSTAINABILITY, INSULATION IS THE BEST WAY TO PREVENT ENERGY WASTE Energy Efficiency • Our customers are creating homes in the houses we build with them, and that includes keeping their families safe and warm while also saving energy Responsible Materials •
Slide 15: Social Governance and Responsibility
Social Governance and Responsibility MAINTAINING TURNOVER SIGNIFICANTLY BELOW INDUSTRY AVERAGE SINCE EARLY 2017 Employee Benefits • Medical insurance • 401k • Paid time-off benefits Employee Programs • Longevity-based stock awards • Financial wellness program • Installed Building Products Foundation
Slide 16: Diversity, Equity, and Inclusion (DEI)
Diversity, Equity, and Inclusion (DEI) WE ARE COMMITTED TO MAINTAINING WORKPLACES FREE FROM DISCRIMINATION AND HARASSMENT Management training programs intend to address minority representation in management 1 and sales positions, as well as gender income equality 2 Assessment of vendors and supplier
Slide 17: Community and Employee Engagement
Community and Employee Engagement COMMITMENT TO OUR EMPLOYEES AND COMMUNITIES WE SERVE INSTALLED BUILDING PRODUCTS Impact The scholarship has allowed me to focus on my studies without having to be worried about my financial responsibilities at school. $2.4 million in scholarships have been committed
Slide 18: Financial Performance
| i, 1a Financial Performance
Slide 19: Strong Top-Line Momentum
Strong Top-Line Momentum 20% REVENUE CAGR FROM 2015 TO 2023 Twelve months ended December 31, LTM (in millions) 2015 2016 2017 2018 2019 2020 2021 2022 9/30/2023 IBP Residential Sales Residential Sales Growth % 29.0 % 25.0 % 18.1 % 9.8 % 9.5 % 20.8 % 33.2 % 5.5 % U.S. Residential Completions 968 1,06
Slide 20: Summary Financial Results
Summary Financial Results Twelve months ended December 31, LTM ($ in millions) 2019 2020 2021 2022 9/30/2023 Net Revenue $ 1,512 $ 1,653 $ 1,969 $ 2,670 $ 2,744 % Net Revenue Growth1 13.1 % 9.4 % 19.1 % 35.6 % 9.0 % Same Branch Consolidated Sales Growth 8.6 % 4.5 % 9.7 % 24.6 % (76.4) % COGS (Adjust
Slide 21: Multi-Year Financial Improvement
Multi-Year Financial Improvement ADDITIONAL VALUE DRIVEN BY OPERATING LEVERAGE AND NATIONAL SCALE Adjusted Gross Profit1 Adjusted Selling & Administrative2 1 Adjusted Gross Profit is a non-GAAP financial measure. A reconciliation to the most comparable measure prepared in accordance with GAAP is inc
Slide 22: Strong Balance Sheet
Strong Balance Sheet Twelve months ended December 31, ($ in millions) 2019 2020 2021 2022 Q3 2023 Cash $ 178 $ 232 $ 334 $ 230 $ 340 Short-Term Investments 38 — — — — Senior Notes, net of unamortized debt issuance costs1 295 296 296 297 297 Term Loan, net of unamortized debt issuance costs2 198 199
Slide 23: Appendix
Appendix
Slide 24: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation Twelve months ended December 31, LTM ($ in millions) 2019 2020 2021 2022 9/30/2023 Net Income $ 68 $ 97 $ 119 $ 223 $ 248 1 Addback of employee pay, Interest expense 28 30 33 42 39 employee medical expenses and legal fees Provision for income taxes 24 34 37
Slide 25: Adjusted Selling & Administrative Expense
Adjusted Selling & Administrative Expense Twelve months ended December 31, LTM ($ in millions) 2019 2020 2021 2022 9/30/2023 Selling & administrative $ 289 $ 320 $ 365 $ 439 $ 485 Acquisition related expenses 3 3 4 3 2 Gains on acquisition earnouts — — (1) (16) (15) Share-based compensation expense
Slide 26: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation Three months ended September 30, ($ in millions) 2023 2022 Net income, as reported $ 67,992 $ 60,978 Adjustments for adjusted net income Share based compensation expense 3,516 3,212 Acquisition related expenses 157 (94) COVID-19 expenses 1 — 2 Amortization expense
Slide 27: Adjusted Cost of Sales and Adjusted Gross Profit Reconciliation
Adjusted Cost of Sales and Adjusted Gross Profit Reconciliation Twelve months ended December 31, LTM ($ in millions) 2019 2020 2021 2022 9/30/2023 Net revenue $ 1,512 $ 1,653 $ 1,969 $ 2,670 $ 2,744 Cost of sales 1,077 1,143 1,379 1,842 1,842 Share-based compensation expense — — — 1 1 COVID-19 expen
Slide 28: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Twelve months ended December 31, LTM ($ in millions) 2019 2020 2021 2022 9/30/2023 Net cash provided by operating activities $ 123 $ 181 $ 138 $ 278 $ 330 Purchases of property and equipment (50) (34) (37) (46) (57) Free cash flow $ 73 $ 147 $ 101 $ 232 $ 273 APPENDIX 2
Slide 29: Investor Relations
INVESTOR RELATIONS 614-221-9944 investorrelations@installed.net
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