Quanex Building Products Corporation · NYSE:NX
Quanex Building Products — Investor Day (February 2025)
81 slides from Quanex Building Products's investor day presentation, Feb 6, 2025
Slide 1: Investor & Analyst Day
FEBRUARY 6, 2025 INVESTOR & ANALYST DAY
Slide 2: Safe Harbor Statement
SAFE HARBOR S TATEMENT Forward Looking Statements Statements that use the words “anticipate,” “estimated,” “expect,” “could,” “should,” “target,” “believe,” “will,” “might,” “predict,” “pursue” or similar words reflecting future expectations or beliefs are forward-looking statements. This presentati
Slide 3: A Part of Something Bigger
A PART OF SOMETHING BIGGER Our vison is to be an innovative and growth-focused manufacturing company that consistently exceeds the expectations of our customers, team members, shareholders and communities 3
Slide 4: Agenda
AGENDA 01 Welcome 02 Introduction to the “NEW” Quanex 03 Profitable Growth Strategy Blueprint 04 Product Lines By Segment 05 Financial Overview 06 Q&A 4
Slide 5: Today's Presenters
EXECUTIVE TEAM BUSINESS SEGMENT PRESIDENTS GEORGE BOB CHRIS TODAY’S WILSON DANIELS ALDERSON PRESENTERS Chairman, President & CEO President, Hardware Solutions President, Extruded Solutions SCOTT JOHN JIM PETER ZUEHLKE SLEVA NIXON SANTO SVP, President, President, President, CFO & Treasurer Wood Solut
Slide 6: Introduction to the "New" Quanex
INTRODUCTION T O THE “NEW” QUANEX GEORGE WILSON Chairman, President & CEO 6
Slide 7: Quanex At-a-Glance
QUANEX AT- A-GLANCE PROFORMA FY 2024 REVENUE BREAKDOWN Global manufacturer with Diversified business Key Strengths and Market Leadership best-in-class team, extensive operating and reporting plant network and expansive through three segments • Core capabilities and broad ~ 40% ~ 60% operating footpr
Slide 8: Strengthened Portfolio and Strategic Execution Through Tyman Acquisition
S TRENGTHENED POR TFOLIO AND S TRATEGIC EXECUTION THROUGH T YMAN ACQUISITION Combined Enhanced scale Delivering enhanced complementary through expansion of offering of differentiated COMBINED COMPANY PF FY 2024(1) product portfolios and North American and engineered components customer bases interna
Slide 9: Making Meaningful Progress Following Transaction Close
MAKING MEANINGFUL PROGRESS FOLLOWING TRANSACTION CLOSE REALIZING MATERIAL, ACTIONABLE COST SYNERGIES PROGRESSING ON INTEGRATION TOTAL Retaining the top talent from each of legacy Quanex ~$30M run-rate cost synergies across Corporate (~30%), and legacy Tyman to ensure a “best-in-class” offering Procu
Slide 10: Core Manufacturing Capabilities with Broad Applications
CORE MANUFACTURING C APABILITIES WITH BROAD APPLIC ATIONS RUBBER EXTRUSION VINYL EXTRUSION WOODWORK The continuous process in which rubber and PVC resin, impact modifiers, UV and heat Interior wood components are created other additive compounds are softened stabilizers as well as flow agents are me
Slide 11: Establishing a Global and Differentiated Manufacturing Footprint
ES TABLISHING A GLOBAL AND DIFFERENTIATED MANUFACTURING FOOTPRINT Extensive global DOMESTIC FOOTPRINT manufacturing capacity INTERNATIONAL FOOTPRINT (48 plants) Domestic footprint supports local customer base Ideally positioned to handle international supply chain disruptions Efficient design allowi
Slide 12: Secular Tailwinds Support Strong Recovery in U.S. Residential Construction
SECULAR TAILWINDS SUPPORT A S TRONG RECOVERY IN U.S. RESIDENTIAL CONSTRUCTION Over a decade of under-building has left the U.S. housing market ROBUST LONG-TERM DEMAND structurally short of demand (estimated ~2.8mm homes1) FOR NEW CONSTRUCTION Low mortgage rate “lock-in” limits for sale inventory Rap
Slide 13: Broader Trends Expected to Drive Renovations
BROADER TRENDS EXPECTED TO DRIVE RENOVATIONS WITH A GRADUAL RECOVERY IN NEW CONSTRUCTION Lack of construction in recent years has led to a ~1.1mm1 home undersupply in the three largest Western European nations3 GRADUAL RECOVERY IN NEW CONSTRUCTION Growing immigration in Europe is driving up a demand
Slide 14: Taking Sustainability to the Next Level
TAKING SUS TAIN ABILIT Y TO THE NEXT LEVEL Accelerating trends provide significant opportunities to grow in both existing and adjacent markets EXPANDING OUR ENERGY-EFFICIENCY SOLUTIONS ENHANCING OUR SUSTAINABILITY INITIATIVES NEW PRODUCT DEVELOPMENT Developing new sustainability strategy that sets n
Slide 15: Profitable Growth Strategy Blueprint
PROFITABLE GROW TH S TRATEGY BLUEPRINT GEORGE WILSON Chairman, President & CEO 15
Slide 16: Capitalizing on Strong Foundation for Long-Term Growth & Success
CAPITALIZING ON S TRONG F OUNDATION F OR LONG -TERM GROW TH & SUCCESS PORTFOLIO OF SOLUTIONS BUILT TRACK RECORD OF SUCCESS FOUNDATION BUILT FOR GROWTH TO SUCCEED Executing on organic growth and Comprising products with strong brand integration, synergy realization recognition and serving 90+ countri
Slide 17: Strategic Roadmap for Growth and Value Creation
S TRATEGIC ROADMAP KEY ELEMENTS OF THE STRATEGY TYMAN CONTRIBUTION FOR GROW TH AND VALUE CREATION Acquisition-driven growth in • Enhances product offering and helps capture additional key areas market opportunities • Nearly doubles revenue to almost $2 Billion BOLD Drive innovation across business •
Slide 18: "Bigger" Pathway Driving Meaningful Growth to ~$4B in Sales
“ B I G G E R ” PAT H WAY D R I V I N G MEANINGFUL GROW TH TO ~ $4B IN SALES Fully aligned with “BIGGER” strategic STRONG FINANCIAL FOUNDATION roadmap for growth Capitalizing on near- and and value creation long-term organic growth ADDITIONAL VALUE CREATION opportunities, as well as PRODUCT INNOVATI
Slide 19: Exciting Path to Profitably Grow Revenue to ~$4B by 2029
E X C I T I N G P A T H T O P R O F I T A B LY G R O W R E V E N U E T O ~$ 4 B B Y 2 0 2 9 QUANEX EBITDA POTENTIAL (BY 2029) ($ IN MILLIONS) 800 700 Cost Synergy ~ 230 ~ 700 Integration Additional Opportunity Sales Upside 600 500 ~ 75 ~ 470 Scale M&A into 400 ~ 25 a new vertical ~ 40 ~ 30 Medium-te
Slide 20: Growing Manufacturing Business with Core Capabilities & Broad Applications
GROWING MANUFACTURING BUSINESS WITH CORE C APABILITIES & BROAD APPLIC ATIONS A global market leader focused on niche products and aligned with top OEMs 01 across all product categories 02 Strong free cash flow generation, healthy balance sheet with significant liquidity Material science and process
Slide 21: Product Lines by Operating Segment
PRODUCT LINES BY OPERATING SEGMENT 21
Slide 22: Product Lines by Operating Segment
PRODUCT LINES BY OPERATING SEGMENT HARDWARE SOLUTIONS EXTRUDED SOLUTIONS CUSTOM SOLUTIONS Insulating Glass Spacers (North America & International) Vinyl / PVC Extrusions Window & Door Hardware (North America & International) Wood Solutions (North America & International) Sealing Solutions Custom Mix
Slide 23: Bob Daniels – Hardware Solutions
BOB DANIELS President, Hardware Solutions HARDWARE SOLUTIONS Window & Door Hardware (North America & International) EXTRUDED SOLUTIONS CUSTOM SOLUTIONS Screens & Other Fenestration Components 23
Slide 24: Hardware Solutions At-a-Glance
HARDWARE SOLUTIONS Manufacturing Footprint AT-A-GLANCE NORTH AMERICA EUROPE OPERATING SEGMENT OVERVIEW • Manufactures window and door hardware, screens and other fenestration components • 22 manufacturing locations and 9 warehouses across the world # of Employees ASIA 3,453 ~ 50% REVENUE Hardware So
Slide 25: Window & Door Hardware | North America
WINDOW & DOOR HARDWARE | NORTH AMERICA PRODUCT LINE OVERVIEW MANUFACTURING FOOTPRINT Produces a broad range of high quality and highly customized window and door components • Highly engineered products • Well established customer base with strong value impact for • Strong NA manufacturing customers
Slide 26: Window & Door Hardware | North America Customer & Competitor Profile
WINDOW & DOOR HARDWARE | NORTH AMERICA Customer & Competitor Profile TOP 10 CUSTOMERS CUSTOMER DYNAMICS COMMODITY COST DYNAMICS AND CONTROLS CUSTOMER % OF SALES Customer A 21% • Strategic partner for • Continued favorable pricing anticipated Customer B 12% customers, with long-standing in 2025 for t
Slide 27: Window & Door Hardware North America Strengths and Opportunities
STRENGTHS OPPORTUNITIES Full solution provider with strong technical expertise, Focused on protecting and growing share through value-added services, and a broad portfolio NPD development CASEMENT WINDOW H/W CASEMENT WINDOW H/W • Reputation for quality products with unparalleled support • Continued
Slide 28: Window & Door Hardware | International
WINDOW & DOOR HARDWARE | INTERN ATION AL PRODUCT LINE OVERVIEW MANUFACTURING FOOTPRINT Produces highly engineered window and door hardware and accessories • Well established customer • Distributor partnership model to base enable efficient global coverage • Industry recognized brands • Highly-automa
Slide 29: Window & Door Hardware | International Customer & Competitor Profile
WINDOW & DOOR HARDWARE | INTERN ATION AL Customer & Competitor Profile TOP 10 CUSTOMERS CUSTOMER DYNAMICS COMMODITY COST DYNAMICS AND CONTROLS CUSTOMER % OF SALES Customer A 3% • Well established customer • Main commodities (zinc die-casting, Customer B 2% base extruded aluminum and aluminum Custome
Slide 30: Window & Door Hardware International Strengths and Opportunities
STRENGTHS OPPORTUNITIES CASEMENT WINDOW H/W CASEMENT WINDOW H/W • Strong heritage and reputation of GIESSE brand achieved • Solution for ALU16 to increase market share on residential thanks to Quality Innovation Design DNA and number of • Sustainable solutions to be ready for the new era of complian
Slide 31: Screens & Other Fenestration Components
SCREENS & O THER FENES TRATION COMPONENT S PRODUCT LINE OVERVIEW MANUFACTURING FOOTPRINT • Largest portfolio of screen • Well established customer solutions for windows and base patio doors, as well as • Highly integrated in customer exterior and patio door supply chain thresholds and other precisio
Slide 32: Screens & Other Fenestration Components Customer & Competitor Profile
SCREENS & O THER FENES TRATION COMPONENT S Customer & Competitor Profile TOP 10 CUSTOMERS CUSTOMER % OF SALES CUSTOMER DYNAMICS COMMODITY COST DYNAMICS AND CONTROLS Customer A 38% Customer B 14% • Well established customer base • Most of Quanex’s screen/screen door Customer C 8% ─ Top 10 customers a
Slide 33: Chris Alderson – Extruded Solutions
CHRIS ALDERSON President, Extruded Solutions EXTRUDED SOLUTIONS Insulating Glass Spacers (North America & International) Vinyl / PVC Extrusions (North America & International) HARDWARE SOLUTIONS Sealing Solutions CUSTOM SOLUTIONS Miscellaneous Specialty Products 33
Slide 34: Extruded Solutions At-a-Glance
EXTRUDED Manufacturing Footprint SOLUTIONS NORTH AMERICA EUROPE AT-A-GLANCE OPERATING SEGMENT OVERVIEW • Manufactures IG spacer products, vinyl and composite profiles used in the assembly of windows, doors, conservatories and roofs, fencing, decking, piling and fascia trims • 11 manufacturing locati
Slide 35: Insulating Glass Spacers | North America
INSULATING GLASS SPACERS | NOR TH AMERIC A PRODUCT LINE OVERVIEW MANUFACTURING FOOTPRINT Highly engineered products focused on improving window and patio door thermal and energy efficiency • Produces highly engineered IG • Well established customer spacer products using compound base secured by long
Slide 36: Insulating Glass Spacers | North America Customer & Competitor Profile
INSULATING GLASS SPACERS | NOR TH AMERIC A Customer & Competitor Profile TOP 10 CUSTOMERS CUSTOMER DYNAMICS COMMODITY COST DYNAMICS AND CONTROLS CUSTOMER % OF SALES Customer A 3% • The IG Spacer segment • Dura products are butyl based with Customer B 3% maintains a broad, well costs generally aligni
Slide 37: Insulating Glass Spacers North America Strengths and Opportunities
STRENGTHS OPPORTUNITIES Large and diverse customer base with well Increased automation to make spacer established products & brands systems more competitive INSULATING Excellent thermal properties with multiple Continued growth due to the push for color offerings GLASS SPACERS energy-efficient produ
Slide 38: Insulating Glass Spacers | International
INSULATING GLASS SPACERS | INTERN ATION AL PRODUCT LINE OVERVIEW MANUFACTURING FOOTPRINT Highly engineered products focused on improving window and patio door thermal efficiency • Produces highly engineered IG • International sales growth engine spacer products using • Diverse customer base generati
Slide 39: Insulating Glass Spacers | International Customer & Competitor Profile
INSULATING GLASS SPACERS | INTERN ATION AL Customer & Competitor Profile TOP 10 CUSTOMERS CUSTOMER % OF SALES Customer A 21% CUSTOMER DYNAMICS COMMODITY COST DYNAMICS AND CONTROLS Customer B 4% Customer C 3% • The International IG Spacer • Actively qualifying new materials as Customer D 3% segment s
Slide 40: Insulating Glass Spacers International Strengths and Opportunities
STRENGTHS OPPORTUNITIES Strong brand equity Transition to full spacer and sealant system supplier Market leader in flexible spacers INSULATING Greater focus on innovation and NPD GLASS SPACERS Wide product range - Product/Market INTERN ATION AL combination Tightening of energy codes & standards Trus
Slide 41: Vinyl/PVC Extrusions | North America
VINYL/PVC EXTRUSIONS | NORTH AMERICA PRODUCT LINE OVERVIEW MANUFACTURING FOOTPRINT Produces vinyl profiles that constitute the framing materials used in the assembly of windows and doors • 2 manufacturing facilities • Well-established customer base (500,000 sq-ft) secured by long-term contracts • St
Slide 42: Vinyl/PVC Extrusions | North America Customer & Competitor Profile
VINYL/PVC EXTRUSIONS | NORTH AMERICA Customer & Competitor Profile TOP 10 CUSTOMERS CUSTOMER % OF SALES CUSTOMER DYNAMICS COMMODITY COST DYNAMICSAND CONTROLS Customer A 19% Customer B 17% • Top 10 customers account for • Quanex has an established price Customer C 11% ~83% of sales and have an pass-t
Slide 43: Vinyl/PVC Extrusions North America Strengths and Opportunities
STRENGTHS OPPORTUNITIES Early entrant into the fenestration Mikron has a light weight residential and market and today offers several patented heavy weight commercial product offering house systems. which creates opportunities as commercial R&R grows VINYL/PVC Vertically integrated in-house EXTRUSIO
Slide 44: Vinyl/PVC Extrusions | International
VINYL/PVC EXTRUSIONS | INTERN ATION AL PRODUCT LINE OVERVIEW MANUFACTURING FOOTPRINT Produces vinyl and composite profiles used in the assembly of windows, doors, conservatories and roofs, fencing, decking, piling and fascia trims • Single site location with main • Strong partnership with extrusion
Slide 45: Vinyl/PVC Extrusions | International Customer & Competitor Profile
VINYL/PVC EXTRUSIONS | INTERN ATION AL Customer & Competitor Profile TOP 10 CUSTOMERS CUSTOMER % OF SALES CUSTOMER DYNAMICS COMMODITY COST DYNAMICS AND CONTROLS Customer A 6% Customer B 5% • No single customer represents • Primary raw material is PVC resin, Customer C 4% over 10% of sales and only t
Slide 46: Vinyl/PVC Extrusions International Strengths and Opportunities
STRENGTHS OPPORTUNITIES Well established brand (Recognized Continue to gain market share & Trusted) take advantage of competitor instability/poor service Reputation for Innovation, Quality and VINYL/PVC Service Excellence Eco friendly range/improved EXTRUSIONS sustainability via own in house closed
Slide 47: Seals
SEALS PRODUCT LINE OVERVIEW MANUFACTURING FOOTPRINT Producer of high-performance sealing solutions • Trusted brands such as • Uses a wide range of materials and Q-LON and Foam-Tite have manufacturing technologies to serviced the industry for meet the fenestration market's over 60 years form, fit, an
Slide 48: Seals Customer & Competitor Profile
SEALS Customer & Competitor Profile TOP 10 CUSTOMERS CUSTOMER % OF SALES Customer A 10% CUSTOMER DYNAMICS COMMODITY COST DYNAMICS AND CONTROLS Customer B 5% Customer C 4% • Low customer concentration with • Being mainly plastic, there is a correlation Customer D 3% Top 10 customers account for with
Slide 49: Seals Strengths and Opportunities
STRENGTHS OPPORTUNITIES Broadest seals portfolio in the fenestration Innovate and grow share through customer industry NPD leveraging our design capabilities Design expertise Market share increase through dedicated Commercial Strategy developing In-house tooling capabilities partnerships with timber
Slide 50: Misc. Specialty Products
MISC. SPECIALT Y PRODUCT S PRODUCT LINE OVERVIEW MANUFACTURING FOOTPRINT History of performance and product knowledge of specialty products • Solar panel sealant solutions improve • PFR's consist of sealants, panel longevity and maximize power clips, equipment, and • Flashing tape is a self-adhesive
Slide 51: Misc. Specialty Products Strengths and Opportunities
STRENGTHS OPPORTUNITIES SOLAR SOLAR • History of performance and quality • Working with external PV R&D groups (academic & manufacturer's) to develop new technology modules with • Strong technical support edge sealant • Quanex name is present in a lot of technical • New PV technologies that require
Slide 52: Custom Solutions
CUSTOM SOLUTIONS JOHN SLEVA President, Wood Solutions JIM NIXON President, Custom Mixing Solutions CUSTOM SOLUTIONS PETER SANTO President, Access Solutions Wood Solutions HARDWARE SOLUTIONS EXTRUDED SOLUTIONS Custom Mixing Solutions Access Solutions 52
Slide 53: Custom Solutions At-a-Glance
CUSTOM SOLUTIONS Manufacturing Footprint AT-A-GLANCE NORTH AMERICA OPERATING SEGMENT OVERVIEW • Manufactures high-quality hardwood and engineered wood components, technically advanced rubber compounds and specialty access solutions • 15 manufacturing locations and 3 warehouses across North America #
Slide 54: Wood Solutions
WOOD SOLUTIONS PRODUCT LINE OVERVIEW MANUFACTURING FOOTPRINT Single-source supplier of high-quality hardwood and engineered wood cabinet doors and drawer fronts and components for kitchen and bath OEMs • Close working relationship • Opportunity to expand into adjacent with top cabinet OEMs wood prod
Slide 55: Wood Solutions Customer & Competitor Profile
WOOD SOLUTIONS Customer & Competitor Profile TOP 10 CUSTOMERS CUSTOMER DYNAMICS COMMODITY COST DYNAMICS AND CONTROLS CUSTOMER % OF SALES Customer A 29% • Quanex has cultivated a longstanding • Pricing of hardwood products is typically based on Customer B 15% customer base which includes the pricing
Slide 56: Wood Solutions Strengths and Opportunities
STRENGTHS OPPORTUNITIES SEMICUSTOM SEMICUSTOM • Regional JIT door service across the U.S. from • Staff weekend/night shifts to help increase OR to OH; consistent quality and service; short capacity in existing plants lead times, strong customer service STOCK STOCK WOOD • Able to combine a wide range
Slide 57: Custom Mixing Solutions
CUSTOM MIXING SOLUTIONS PRODUCT LINE OVERVIEW MANUFACTURING Technically advanced rubber compounding facility supporting niche and FOOTPRINT specialized products for the custom mixing market • Well-invested industrial plant with capacity • Highly customer centric available to support 40% growth witho
Slide 58: Custom Mixing Solutions Customer & Competitor Profile
CUSTOM MIXING SOLUTIONS Customer & Competitor Profile TOP 10 CUSTOMERS CUSTOMER % OF SALES CUSTOMER DYNAMICS COMMODITY COST DYNAMICS AND CONTROLS Customer A 21% Customer B 13% • Geography – United States • Raw Material dependency on crude oil and Customer C 12% (mostly regional) natural gas QUANEX -
Slide 59: Custom Mixing Solutions Strengths and Opportunities
STRENGTHS OPPORTUNITIES Product quality and customer service Organic growth – Increase capacity on site or new location State of the art machinery Inorganic growth – Strategic partnership or acquisition CUSTOM MIXING SOLUTIONS Clean, climate-controlled facility Vertical integration – Suppliers & cus
Slide 60: Access Solutions
ACCESS SOLUTIONS PRODUCT LINE OVERVIEW MANUFACTURING FOOTPRINT Industry leader in the design and manufacture of specialty access solutions for industrial, commercial and U.S. residential applications • Manufacturing facilities across the U.S. • Commercial product range is highly and in the U.K. for
Slide 61: Access Solutions Customer & Competitor Profile
ACCESS SOLUTIONS Customer & Competitor Profile TOP 10 CUSTOMERS CUSTOMER DYNAMICS COMMODITY COST DYNAMICS AND CONTROLS CUSTOMER % OF SALES Customer A 8% • Low customer concentration • Raw material pricing for steel and aluminum has Customer B 8% with Top 10 customers been relatively stable Customer
Slide 62: Access Solutions Strengths and Opportunities
STRENGTHS OPPORTUNITIES Strong brand awareness with Bilco Immediate potential to capitalize on the recent investment in state-of-the-art manufacturing Significant presence and reputation in the facility in U.K. commercial construction space Geographic expansion into target European Well-established
Slide 63: Financial Overview
FIN ANCIAL OVERVIEW SCOTT ZUEHLKE SVP, CFO & Treasurer 63
Slide 64: Tyman Acquisition Driving Meaningful Financial Growth: FY25 Guidance
T YMAN ACQUSITION DRIVING MEANINGFUL FINANCIAL GROW TH FY 2025 GUIDANCE OTHER MODELING ASSUMPTIONS ~$1.84 – $1.86B ~$270 – $280M ~$100M NET SALES ADJUSTED EBITDA FREE CASH FLOW GROSS MARGIN ~29% • Year-over-year sales growth • Year-over-year margin • Free cash flow ramp in 2H driven by contribution
Slide 65: Potential Estimated Tariff Exposure
PO TENTIAL ES TIMATED TARIFF EXPOSURE FY 2025E COGS EXPOSURE POTENTIAL ESTIMATED MARGIN EXPOSURE 90% Price Pass- 75% Price Pass- 60% Price Pass- FY25E % of Total Incremental Tariff Through Through Through Country COGS Rate 0.0% China ~5% 10% -0.1% Canada ~2% 25% -0.2% Mexico ~9% 25% Other ~1% 0% -0.
Slide 66: Building on Track Record of Growth and Margin Expansion
BUILDING ON TRACK RECORD OF GROW TH AND MARGIN EXPANSION REVENUE Step Change ADJUSTED EBITDA Step Change ($ in millions) Driven by Driven by Tyman Tyman Acquisition Acquisition ~$1,850 $300 ~$275 15% 14% Adjusted EBITDA ($ in millions) CAGR ~11% $250 12% 11% $200 $182.4 % Margin $1,278 9% $1,222 $15
Slide 67: Enhancing Profitability in Second Half of Fiscal Year Due to Seasonality
ENHANCING PROFITABILIT Y IN SECOND HALF OF FISCAL YEAR DUE TO SEASONALIT Y FREE CASH FLOW 1ST HALF 2ND HALF ADJUSTED EBITDA 1ST HALF 2ND HALF (% of total) ~10% of Annual FCF (5-Yr Avg.) ~90% of Annual FCF (5-Yr Avg.) ($ in millions) ~40% of Annual Adj. EBITDA (5-Yr Avg.) ~60% of Annual Adj. EBITDA (
Slide 68: Increasing Long-Term Total Shareholder Returns
INCREASING LONG -TERM TOTAL SHAREHOLDER RETURNS CAPITAL ALLOCATION PRIORITIES MAINTAIN HEALTHY, COMMITTED TO OPPORTUNISTICALLY DEPLOY CASH INTO AREAS RETURN EXCESS CASH YET EFFICIENT, PAYING DIVIDEND WITH THE HIGHEST RISK-ADJUSTED RETURNS AND TO SHAREHOLDERS BALANCE SHEET ABOVE MINIMUM HURDLE RATE N
Slide 69: Solid Track Record of Deleveraging Post-Acquisition
SOLID TRACK RECORD OF DELEVERAGING POS T -ACQUISITION NET LEVERAGE 1 Tyman Acquisition 3.7x 3.5x Liniar and LMI Custom Woodcraft Mixing Acquisitions Acquisition 2.7x 2.5x 2.3x 2.2x 2.0x PF 2.1x 2 ~1.0x - 1.5x NET LEVERAGE 1.5x 1.2x RATIO TARGET 0.8x 0.6x 0.6x 0.5x 0.3x 0.1x 0.1x 0.1x 0.0x (0.2)x (0.
Slide 70: Strong Free Cash Flow Generation Expected to Improve Further
S TRONG FREE CASH FLOW GENERATION EXPECTED TO IMPROVE FUR THER FREE CASH FLOW ($ in millions) ~$225+ $200 FREE CASH FLOW PRIORITIES • Debt paydown, explore $160 capital allocation options through M&A, stock repurchases and dividend $120 $109.7 increases ~$100 • Improve working capital profile of leg
Slide 71: Investing for Sustainable Long-Term Growth
INVES TING F OR SUS TAIN ABLE LONG -TERM GROW TH CAPEX ($ in millions) Project Specific $90 Growth Capex 30% ~23% $80 5-Yr Avg Capex % of EBITDA $82.5 25% $70 $60 20% $50 15% $40 $37.4 ~$37.1 $30 $33.1 10% $25.7 $24.0 $20 5% $10 $0 0% FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025E (1) Capex % of E
Slide 72: Growing Manufacturing Business with Core Capabilities & Broad Applications
GROWING MANUFACTURING BUSINESS WITH CORE C APABILITIES & BROAD APPLIC ATIONS A global market leader focused on niche products and aligned with top OEMs 01 across all product categories 02 Strong free cash flow generation, healthy balance sheet with significant liquidity Material science and process
Slide 73: A Discussion with Our Presenters
EXECUTIVE TEAM BUSINESS SEGMENT PRESIDENTS A GEORGE PETER BOB JIM WILSON SANTO DANIELS NIXON Chairman, President, President, President, & President & CEO Access Solutions Hardware Solutions Mixing Solutions A DISCUSSION W ITH OUR PR E SENT ERS SCOTT JOHN CHRIS ZUEHLKE SLEVA ALDERSON SVP, President,
Slide 74: Appendix
APPENDIX 74
Slide 75: GAAP/Non-GAAP Reconciliation (Unaudited)
G AAP/NON-G AAP RECONCILIATION (UN AUDITED) FY24, FY23, FY22, FY21 & FY20 Adjusted Net Income & Adjusted EBITDA to Net Income Twelve Months Ended Twelve Months Ended Twelve Months Ended Twelve Months Ended Twelve Months Ended Reconciliation of Adjusted Net Income October 31, 2024 October 31, 2023 Oc
Slide 76: GAAP/Non-GAAP Reconciliation: Free Cash Flow
G AAP/NON-G AAP RECONCILIATION (UN AUDITED) Free Cash Flow ($ in thousands) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Fiscal 2020 Cash (used for) provided by operating activities ($3,657) $6,129 $45,089 $53,235 $100,796 Capital expenditures ($9,312) ($7,001) ($4,360) ($5,053) ($25,726) Free Cash Flow ($12,969
Slide 77: GAAP/Non-GAAP Reconciliation: Net Debt & Net Leverage
G AAP/NON-G AAP RECONCILIATION (UN AUDITED) Net Debt & Net Leverage The following table reconciles the Company's Net Debt which is defined as total debt principal of the Company plus finance lease obligations minus cash. FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Capitalization ($ in thousand
Slide 78: Legacy Quanex GAAP/Non-GAAP Reconciliation
LEG ACY QUANEX G AAP/NON -G AAP RECONCILIATION (UN AUDITED) Adjusted Net Income and Adjusted EBITDA (USD in millions unless otherwise stated) Twelve months Ended October 31, 2024 Reconciliation Revenue $ 1074 Reconciliation of Adjusted Net Income Net (loss) income as reported 51 EBITDA reconciling i
Slide 79: Legacy Tyman GAAP/Non-GAAP Reconciliation
LEG ACY T YMAN G AAP/NON -G AAP RECONCILIATION (UN AUDITED) Adjusted EBITDA (GBP in millions unless otherwise stated) Twelve months Ended October 31, 2024 Reconciliation Revenue £ 623 Revenue (in USD) $ 797 Operating profit 36 Quanex transaction and integration costs 24 Restructuring costs 3 CEO tra
Slide 80: Pro Forma FY 2024 Reconciliation
PRO F ORMA FY 2024 RECONCILIATION Revenue and Adjusted EBITDA Pro Forma FY 2024 Legacy Legacy (1) ($ in millions USD) Quanex Tyman PF FY24 Net Sales $1,074 $797 $1,871 Adj EBITDA $148 $118 $266 13.8% 14.8% 14.2% (1) Includes $13.2 million in revenue related to the U.S. vinyl fencing business that wa
Slide 81: Investor Contact
INVES TOR CONTACT Scott Zuehlke SVP, Chief Financial Officer & Treasurer 945 Bunker Hill Rd., Suite 900 Houston, TX 77024 (713) 877-5327 scott.zuehlke@quanex.com 81
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