Ufp Industries, Inc. · NASDAQ:UFPI
Ufp Industries — Investor Presentation (April 2024)
32 slides from Ufp Industries's investor presentation, Apr 30, 2024
Slide 1: Investor Relations Presentation
S INVESTOR RELATIONS PRESENTATION Results through March 30, 2024 Mixed materials structural crate UFP Packaging Deckorators Surestone composite decking, ProWood Fencing UFP Retail Solutions Commercial wood truss UFP Construction
Slide 2: Forward-looking statements and non-GAAP information
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, and projections abou
Slide 3: UFP Industries operating segments
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
15,800+ Employees worldwide 219 Facilities worldwide 1955 Founded in Grand Rapids, MI $7.0B Q1 2024 TTM Net Sales 40% 31% 25% 4% Based on Q1 2024 TTM Net Sales $2.8B Big box, independents, & buying co-ops $1.8B Industrial manufacturers, OEM’s, agricultural and logistics UFP AT A GLANCE $2.2B Single-
Slide 5: Where We Are
WHERE WE ARE 196 1 4 1 1 9 1 5 219 Locations 9 Countries 5 1
Slide 6: Business model provides sustainable competitive advantages
BUSINESS MODEL PROVIDES SUSTAINABLE COMPETITIVE ADVANTAGES 6 As North America’s largest buyer of softwood lumber, UFP owns scale advantage in sourcing and in serving the three largest softwood end markets – residential construction, retail building products and industrial packaging. While in its ear
Slide 7: Short-Term Forward Outlook
SHORT-TERM FORWARD OUTLOOK RETAIL Market demand down mid-single digits based on forecasts of • Same-store sales growth of Big Box • Home remodeling activity PACKAGING Industrial production down mid-single digits based on • Purchasing Managers Index (PMI) • Durable goods manufacturing • U.S. real GDP
Slide 8: Long-Term Financial Goals
Annual unit sales growth of 7-10% including small acquisitions Achieving and sustaining a 12.5% adjusted EBITDA margin Earn an incremental return on new investment greater than our hurdle rate Maintain a conservative capital structure LONG-TERM FINANCIAL GOALS 8
Slide 9: Value Added Sales
2013 36% 64% 40% 60% 37% 63% 32% 68% 31% 69% Value-added as a percent of sales VALUE ADDED SALES Commodity Value-added 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 10.5% 9.7% 9.9% 7.9% 7.1% 2020 2021 2022 2023 Q1 2024 TTM % of Net Sales 3.9% *In 2020 thru 2023 new products were defined as those that were in the front half of their life cycle, over $1M in sales and growing, an
Slide 11: Innovation and New Products
• Create alternative product lines in close adjacencies to our current business • Address a shortage of skilled labor The company is making investments to Commitment to innovation moves the company steadily up the value chain. INNOVATION AND NEW PRODUCTS In 2022 we launched our Innovation Accelerato
Slide 12: Business Segments
BUSINESS SEGMENTS Commodity 51% Value Added 49% Commodity 23% Value Added 77% Commodity 17% Value Added 83% ProWood Group $2.4 Billion Deckorators $306 Million UFP Edge $146 Million Structural Packaging $1.2 Billion PalletOne $526 Million Protective Packaging Solutions $79 Million Site Built $978 Mi
Slide 13: UFP Retail Solutions
On-trend brands to all major building products retailers, backed by best-in-class in-store and e-commerce support *Sales mix is 72% to Big Box customers and 28% to one- and two-step distribution as of Q1 2024. Premium siding, pattern, trim; interior accent wall products Wood- and mineral-based compo
Slide 14: UFP Packaging
Innovative packaging solutions and components backed by a global manufacturing footprint and the industry’s leading engineering, design, and integrated service teams Structural Packaging Wood, steel, foam and corrugated for mixed material crates and specialty containers; hard cases, lumber processin
Slide 15: UFP Construction
Floor, wall and roof panels, cabinet components, countertops and milled components for modular and manufactured homes; Components for RV/cargo trailer and mobile offices. Offsite prefabrication of value-add formwork, aluminum horizontal shoring and vertical forming solutions for use in infrastructur
Slide 16: Sustainability Continuum
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 products from sustainable sources Mainta
Slide 17: Financials
FINANCIALS () UFP INDUSTRIES
Slide 18: Our Performance
OUR PERFORMANCE Net Earnings (ACI) ROIC 2020 2022 2021 Unit sales growth rate $ in Millions Growth rate Strong track record of growth and performance improvement with emphasis on improving gross profit dollars per unit sold and ROIC. 2023 Non-GAAP Financial Information: Please visit ufpinvestor.com
Slide 19: Managing Lumber Market Risk
MANAGING LUMBER MARKET RISK Adjusted EBITDA Margin Lumber Market Volatility* 34.5% 39.9% 39.9% 6.1% 5.8% 8.4% 9.7% 11.4% 11.2% 11.2% 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% 50% 2020 2021 2022 2023 Q1 2024 TTM Lumber Market Volatility Adjusted EBITDA Margin *Standard deviation of lumber prices divi
Slide 20: Net Sales
NET SALES (in millions) $5,154 $8,636 $9,627 $7,218 $7,035 2020 2021 2022 2023 Q1 2024 TTM UFP Consolidated $2,234 $3,535 $3,771 $2,956 $2,823 2020 2021 2022 2023 Q1 2024 TTM UFP Retail Solutions $1,072 $2,148 $2,395 $1,838 $1,776 2020 2021 2022 2023 Q1 2024 TTM UFP Packaging $1,696 $2,698 $3,144 $2
Slide 21: Adjusted EBITDA
$431 $835 $1,097 $810 $789 2020 2021 2022 2023 Q1 2024 TTM UFP Consolidated $186 $198 $217 $208 $215 2020 2021 2022 2023 Q1 2024 TTM UFP Retail Solutions $100 $300 $376 $244 $221 2020 2021 2022 2023 Q1 2024 TTM UFP Packaging $98 $283 $422 $272 $264 2020 2021 2022 2023 Q1 2024 TTM UFP Construction 8.
Slide 22: Adjusted EBITDA Growth and Unit Sales
UFP Consolidated UFP Retail Solutions UFP Packaging UFP Construction ADJUSTED EBITDA GROWTH AND UNIT SALES 6% 28% 2% (9)% (8)% 36% 94% 31% (26)% (3)% -40% -20% 0% 20% 40% 60% 80% 100% 2020 2021 2022 2023 Q1 2024 TTM (6)% 40% (1)% (6)% (7)% (1)% 200% 25% (35)% (9)% -40% 0% 40% 80% 120% 160% 200% 2020
Slide 23: Balanced Use of Free Cash Flow
BALANCED USE OF FREE CASH FLOW Acquisitions to contribute half of our total annual unit sales growth CapEx plan of $250-300M in 2024 Opportunistic share repurchases and to offset issuances. Current authorization as of April 30 has $97M remaining, expires July 31, 2024. Increasing dividends in line w
Slide 24: Return on Invested Capital
RETURN ON INVESTED CAPITAL Hurdle Rate = 15% Percent20.9% 31.9% 34.6% 22.2% 19.6% 0% 5% 10% 15% 20% 25% 30% 35% 40% 2020 2021 2022 2023 Q1 2024 TTM WACC = 10% Long-Term Goal: Earn an incremental return on new investment greater than our hurdle rate Non-GAAP Financial Information: Please visit ufpinv
Slide 25: Cash Cycle
CASH CYCLE Cash Cycle = Days Receivables Outstanding + Days Supply of Inventory – Days Payables Outstanding 56* 64* 64* 63 62 0 10 20 30 40 50 60 70 80 2020 2021 2022 2023 Q1 2024 YTD Days * Within the cash cycle, we’ve modified our calculation of days payables outstanding to be based on CGS and AP
Slide 26: Recent Acquisitions
Process Identify attractive growth runways in each Business Unit under each Business Segment and identify gaps in our capabilities to pursue those runways. Find new products and services to speed our transformation from commodity sales to value-added selling solutions and brands. Purpose Achieve sca
Slide 27: Capital Structure
CAPITAL STRUCTURE Conservative capital structure ensures ample resources to pursue investment opportunities with the highest return potential. Net Debt to Total Capitalization vs Maximum Target Net Debt to Adjusted EBITDA vs Maximum Target 0.0% 2.5% 0.0% 0.0% 0.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 4
Slide 28: Stock Performance
STOCK PERFORMANCE Long-term returns on UFPI stock are consistently above the proxy peers and major market indices Peers include: MAS, BLDR, TREX, LPX, SSD, BCC, PATK, AMWD, WRK, SON, GEF, ROCK Stock prices are adjusted to account for dividend payouts Source: FactSet as of 4/29/2024 closing prices 48
Slide 29: Quarterly Results
QUARTERLY RESULTS () UFP INDUSTRIES
Slide 30: Net Sales Q1 2024
NET SALES Q1 2024 (in millions) $1,822 $2,044 $1,828 $1,524 $1,639 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 UFP Consolidated $761 $939 $730 $526 $629 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 UFP Retail Solutions $487 $488 $450 $413 $424 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 UFP Packaging $516 $550 $
Slide 31: Adjusted EBITDA Q1 2024
ADJUSTED EBITDA Q1 2024 (in millions) $202 $234 $208 $166 $181 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 UFP Consolidated $49 $69 $56 $35 $55 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 UFP Retail Solutions $67 $69 $54 $53 $44 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 UFP Packaging $62 $69 $77 $65 $54 Q1 20
Slide 32: Thank You
2801 E. Beltline Ave. NE Grand Rapids, MI 49506 (800) 598-9663 - UFPI.com THANK YOU 32