Slide 1: Creating Beautiful Spaces Where We Live, Work, and Play
CREATING BEAUTIFUL CREATING BEAUTIFUL SPACES WHERE WE SPACES WHERE WE LIVE, WORK, AND PLAY LIVE, WORK, AND PLAY November 2023 TSX : ADEN Calgary Public Library: Ceilings, wall panels, and stairs by ADENTRA
Slide 2: Forward-Looking Statements
FORWARD Forward-Looking Statements LOOKING Certain statements in this presentation contain forward-looking information within the meaning of applicable securities laws in Canada (“forward-looking information”). The importation of components or other innovative products does not increase and replace
Slide 3: Creating beautiful spaces where we live, work, and play
Creating beautiful spaces where we live, work, and play From top left: Sacramento Airport - Sacramento, CA; Signal House – Newport Beach, CA; Microsoft Canada Excellence Centre – Vancouver, B.C.; Health Sciences Innovation Building, University 3 of Arizona – Tucson, AZ; Lincolnshire House – Toronto,
Slide 4: A Company Transformed
A COMPANY TRANSFORMED Decorative surfaces by ADENTRA 4
Slide 5: Transformed: By the Numbers
2017 2023 Five-year $ Values except market capitalization in USD (TTM Q3) CAGR1 Sales $800M $2.3B 20% Adjusted EBITDA2 $43M $184M 30% Earnings per Share (basic) $1.08 $1.80 9% TRANSFORMED: Market Capitalization3 C$433M C$624M BY THE NUMBERS Customers 35,000 75,000 Employees 1,100 3,000 Barajas Madri
Slide 6: Transformed - Increased Geography
3. Longstanding and differentiated partnership with Lowe’s Transformed - Increased Geography Unparalleled access to major North American markets 2017 2022 62 85 / 15 400+ 85 90 / 10 800+ Locations Revenue split1 Sales Team Locations2 Revenue split1 Sales Team We bring world-class capabilities to loc
Slide 7: Transformed – Product Portfolio
3. Longstanding and differentiated partnership with Lowe’s Transformed – Product Portfolio Broader product participation, with more emphasis on specialty 2017 2022 14% doors 16% 33% diversified 9%boards 20% hardwood plywood hardwood plywood 6% doors $0.8B Sales 2% 14% mouldings $2.6B Sales 9% mouldi
Slide 8: Transformed – Channels and End Markets
3. Longstanding and differentiated partnership with Lowe’s Transformed – Channels and End Markets 2017 2022 60% 15% ESSENTIAL Industrial Home Centers 35,000+ 75,000+ CUSTOMER Customers Customers1 CHANNELS 98% Industrial 2% ProDealers 25% ProDealers 40% 40% 15% END Commercial New Residential Commerci
Slide 9: Market Potential for our Transformed Business
Market Potential for our Transformed Business1 Future Addressable Market Value Future Addressable Market (more products, more value chain exposure, regional expansion) • All building material product categories across all channels and North American regions at the manufacturer level $43B Total Addre
Slide 10: Positive Multi-year Fundamentals in our End Markets
Positive Multi-year Fundamentals in our End Markets New U.S. Housing Starts1 Aging U.S. Housing Stock & Sales Potential in Multiple Strong Home Equity Levels2 Commercial Segments3 Units Average Age Home Equity Value (millions) (years) (US$Trillions) (US$Billions) 1.8 43 35 600 1.6 1.6 1.6 1.5 42 1.4
Slide 11: A world-class platform of architectural building products
Our unique customer-centric A world-class 5,000 insights inform leading product 75,000 solutions platform of SUPPLIERS CUSTOMERS Includes branded products, architectural Access to small & medium sized end markets exclusive rights and Access to our extensive 150,000+ SKU building demonstrated buying
Slide 12: Demonstrated benefits of scale
GLOBAL SOURCING SALES & MARKETING SPECIFICATION Demonstrated VENDOR RELATIONSHIP TECHNOLOGY STRATEGY & benefits MANAGEMENT SOLUTIONS GOVERNANCE of scale. Our shared core capabilities & support We create ‘sticky’ customer relationships and brand loyalty with 75,000+ home centers, ProDealers and indus
Slide 13: As we have built our capabilities, our financial performance has strengthened
Sales Growth Consistent Earnings As we have built 20% 9% Five-year Sales CAGR1 Five-year Earnings per Share CAGR1 our capabilities, our financial Strong Balance Sheet Dividend Growth performance has 3.0 11% strengthened. Net Debt to Adj. EBITDA Five-year dividend CAGR1 after rents1.3 (Current quarte
Slide 14: Track record of growth and improving margins
Sales and Gross Margin US Millions $2,900 24% Sales Gross margin % 22% Supported by our M&A $2,400 strategy and focus on operational efficiency, we 20% Track record $1,900 have achieved gross margin percentages exceeding of growth and 18% 20% $1,400 improving margins. 16% $900 14% For the past ten $
Slide 15: Platform drives strong and growing cash flow
Adjusted EBITDA1 and Operating Cash Flow before Changes in Working Capital US Millions $300.0 Adj. EBITDA1 Operating Cash Flow before Changes in $250.0 Conversion of Adjusted Working Capital EBITDA1 into Operating Cash Flow before $200.0 Platform drives changes in working capital averages strong and
Slide 16: Responsible Leverage and Significant Liquidity
Responsible Leverage and Significant Liquidity Net Debt / Adjusted EBITDA after Rents1 Major Acquisitions 3.5 Major 3 Acquisition 3.0 +$425 M 2.5 Q3 2023 Unused borrowing capacity 2 Net Debt/Adjusted EBITDA & cash on hand after rents1,2 as at September 30, 2023 1.5 1 0.5 Responsibly managed balance
Slide 17: "Destination 2026" Sales Target
$800M $3.5B $400M $2.6 B1 $200M “Destination 2026” Sales Target 2022 Sales Market Outlook Organic Growth Acquisitions e2026 Run Rate Sales • “Market Outlook” impact expected to be near term Key • Market growth and strategic initiatives driving mid single-digit “Organic Growth” assumptions • “Acquisi
Slide 18: Our Target Financial KPIs
Revenue CAGR Gross Margin1 EBITDA Margin1,4 +8% +20% +10% Our Target Financial KPIs Leverage2 Range Operating Cash flow before changes in working capital Average ROIC3,4 2-3X $+800M +12% Focused on delivering profitable growth and creating shareholder value 1. “Gross Margin” and “EBITDA Margin” are
Slide 19: Demonstrated Growth Through Acquisition
Demonstrated Growth Through Acquisition Track Record – Sales Acquired (US$ millions) Significant market share available in a highly fragmented industry Clear investment criteria EAGLE PLY Architectural products in adjacent / complimentary 670 categories Primary focus on distribution Enhanced access
Slide 20: Creating Beautiful Spaces Where We Live, Work, and Play
One of the leading architectural building products distributors in North America Competitively positioned in highest potential end markets and geographic regions Track record of delivering growth throughout the business cycle, both organically and through acquisitions CREATING BEAUTIFUL SPACES WHERE
Slide 21: Investor Relations
TSX Ticker Symbol ADEN Shares Outstanding1 22,345,708 Market Capitalization2 $624 million Available Liquidity1 +$425 million Investor Relations Website www.ADENTRAgroup.com investors@ADENTRAgroup.com Calgary Public Library: 1. Total as of November 8, 2023. 21 Ceilings, wall panels, and stairs by ADE
Slide 22: Appendix
APPENDIX Decorative surfaces by ADENTRA 22
Slide 23: Total Addressable Market - Customer Channel
Total Addressable Market - Customer Channel $43B1 Industrial • Segment includes OEM manufacturers, commercial Home Center millwork shops, specialty dealers/fabricator, and $10B lumber yards Pro Dealer $16B Pro Dealer • Segment includes one/two-step distributors and Industrial millwork wholesalers $1
Slide 24: Total Addressable Market - Product Category
Total Addressable Market - Product Category $43B1 $1,868 Hardwood $3,603 Boards • Strong share position in key $2,206 Hardwood Plywood $946 Composites building materials - plywood, $6,535 Decorative Surfaces composites, lumber • Significant runway for growth in $14,276 Doors value-add categories suc
Slide 25: Total Addressable Market – Regional
Total Addressable Market – Regional CANADA $43B1 ~$5.2B Total Addressable Market ‘17-’27 CAGR: 1.6% ADENTRA Sales: $262M • ADENTRA has multiple brands and Locations: 8 business locations in each key region MIDWEST N. EAST • Strong market presence, position and ~$7.4B ~$5.5B share in Canada ‘17-’27 C
Slide 26: Proven Approach to Building Value through M&A
Proven Approach to Building Value through M&A EXAMPLE TRANSACTION RESULTS $586 ✓ Growth in key product categories 17% Sales CAGR ✓ +300% growth in D&M ✓ +25% growth in decorative surfaces Mid-term Synergies $272 “Quick Wins” • Bolt-on acquisitions ✓ +100% growth in hardwood lumber • Insurance • Cros
Slide 27: "Destination 2026" Capital Allocation
$800M in Operating Cash Flow before changes in Working Capital $100M Investments in the Business • Maintenance capex & working capital $200M Rent payments • Includes leased facilities “Destination 2026” Acquisitions Capital Allocation • Financed from cash flows and strength of balance sheet • Equity