Simpson Manufacturing Company, Inc. · NYSE:SSD
Simpson Manufacturing — Investor Presentation (March 2023)
39 slides from Simpson Manufacturing's investor presentation, March 2023
Slide 1: Simpson Manufacturing Co., Inc. Investor Presentation March 2023
STRONG FOUNDATION. STRONGER FUTURE. Simpson Manufacturing Co., Inc. Investor Presentation March 2023
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 2IE of the Securities Exchange Act of 1934, as amended. Forward-looking statements generall
Slide 3: Investment Highlights
Investment Highlights Industry leader with unique business model, strong brand recognition and trusted reputation Diversified product offerings and geographies mitigate exposure to cyclical U.S. housing market Leadership position in wood products with significant opportunities in all addressable mar
Slide 4: Simpson's Brand and Culture
Simpson’s Brand and Culture At Simpson, we describe the unique culture of our organization as our “Secret Sauce.” OUR MISSION OUR COMPANY VALUES 1. Relentless Customer Focus 2. Long-Range View 3. High-Quality Products To provide solutions that 4. Be The Leader help people design and build 5. Everybo
Slide 5: 28-Year Trading History
28-Year Trading History 5/25/1994 8/19/2002 11/19/2004 1/1/2012 10/30/2017 7/29/2019 3/24/2020 3/23/2021 12/29/2021 & 12/31/2021 9/8/2022 4/1/2022 Initial public 2 for 1 2 for 1 Founder Barclay Announced Updated COVID-19 Announced 5 Announced SSD closes at Announced offering at $11.50 stock split st
Slide 6: Our Strong Business Model
Our Strong Business Model We engineer, test and manufacture structural connectors, anchors, fasteners, software solutions and other products for new construction, repair and remodel, and do-it- yourself markets. Long-standing, successful • Connector Market Leader relationships with: • 26 of Top 30 U
Slide 7: Our Multilayered Approach
Our Multilayered Approach Innovation Technical & Field Support • 479 Issued Patents (US and foreign; utility and design) • 484 Engineers • 1,641 Registered Trademarks (US and foreign) • 739 Field Sales Reps • 220 Patents Pending (US and foreign) • Thousands of Jobsite Visits • 76 Code Reports Traini
Slide 8: Core Addressable Market
Core Addressable Market(1) Wood Connectors Fasteners Concrete & Truss Market Market Market Size/ Size Size Addressable $10.1 B $15.0 B Market $2.5 B Addressable Addressable Market Market $1.7 B (17%) $1.3 B (9%) SSD Share SSD Share SSD Share $1.35 B $492 M $296 M (54%) (29%) (23%) Many opportunities
Slide 9: Commitment to Growth
Commitment to Growth KEY GROWTH INITIATIVES FOCUSED ON: STRUCTURAL OEM R&R / DIY MASS TIMBER CONCRETE STEEL LEADER IN ENGINEERED LOAD-RATED CONSTRUCTION FASTENING SOLUTIONS LEADER IN CUSTOMER-FACING TECHNOLOGY 9
Slide 10: OEM
OEM KEY GOAL STRATEGY Increase our market share in OEMs. • Lead with fasteners: Market and sell existing product line • Leverage existing anchor product line • Engineer and launch value-added OEM-specific RATIONALE structural solutions • $420 M total addressable market primarily with • Leverage Simp
Slide 11: OEM Spotlight
OEM Spotlight SOLUTION Existing line of fasteners and anchors for OEM Truck Bed Screw Truck bed and crating installations using Quik Strong Drive® TIMBER Screw Drive® tool and collated fasteners Stainless-Steel Titen HD® Anchor Quik Drive® Racking installation using Titen HD® Anchors 11
Slide 12: R&R / DIY
R&R / DIY KEY GOAL STRATEGY Expand brand positioning: Be a known and • Improve retail execution trusted partner for R&R / DIY solutions. • Continue expanding product lines and increase in-store training RATIONALE • Enable consumers to customize, design and create bill-of-materials with software • $7
Slide 13: R&R / DIY Spotlight
R&R / DIY Spotlight SOLUTION Outdoor Accents® decorative hardware – two collections (architectural styles) for building outdoor structures. Mission Collection™ Avant Collection™ Fastener reset at home center customer New fastener sets include Quik Drive® auto-feed screw driving system (pictured abov
Slide 14: Mass Timber
Mass Timber KEY GOAL STRATEGY Become the engineers’ partner of choice for • Extend current products and develop new mass timber connections. product lines specific to the Mass Timber applications • Increase marketing efforts, leverage the brand RATIONALE and develop new relationships • $45 M total a
Slide 15: Mass Timber Spotlight
Mass Timber Spotlight SOLUTION New dedicated line of screws for cross laminated timber (CLT) Simpson products utilized in CLT renovation project at an international airport in North America SDS and SDWS SDHR and SDCP SDCF Simpson products utilized in construction of CLT MDCST48 CBH CMST commercial o
Slide 16: Concrete
Concrete KEY GOAL STRATEGY Become a recognized leader in concrete • Develop focused market-specific playbooks construction. • Expand our current product offering with an emphasis on innovative, cost-saving solutions RATIONALE • Invest to further expand our engineering and testing capabilities • $1.3
Slide 17: Concrete Spotlight
Concrete Spotlight SOLUTION A wide range of product solutions for concrete and masonry projects. Concrete anchor jobsite (above) 44oz. Carbon SET-3G™ Heli-Tie™ Helical Stitching Fabric Adhesive Tie Carbon fabric used as fiber-reinforced polymer (FRP) installation on a concrete structure (left) Titen
Slide 18: Structural Steel
Structural Steel KEY GOAL STRATEGY Convert traditional welded connections to • Develop the bolted connection market by bolted connections. engineering premium construction products • Specify and sell direct to fabricators, erectors, installers and steel building manufacturers RATIONALE • Launch desi
Slide 19: Structural Steel Spotlight
Structural Steel Spotlight SOLUTION Special moment frame Yield-Link® design used to build education buildings in California (left) and in the construction of 10 recreational/amusement locations across the U.S (below) Yield-Link® connection for structural steel framing 19
Slide 20: Construction Fasteners
Construction Fasteners 5 KEY GOAL STRATEGY Be the global market leader in engineered / • Develop critical mass by expanding our load-rated construction fastening solutions. engineered fastener business for DIY/R&R, OEM and Mass Timber markets • Provide innovative products that are preferred by RATIO
Slide 21: Customer-Facing Technology Solutions
Customer-Facing Technology Solutions • Accurate take-offs • Accurate take-offs • Options • EWP design management software • e-commerce Lumberyards Builders & Distributors • Web apps • Anchor Designer Engineers • CFS Designer & • 3rd-party software plug-ins Designers • Digital drawing library Compone
Slide 22: Strong Business Drives Stockholder Value
Strong Business Drives Stockholder Value Our 2022 Sales by Product… EPS(1) ($ USD Millions) $7.76 Concrete Construction $6.12 $282 $4.27 $2.72 $2.98 $1.86 $1.94 Wood $1.29 $1.38 $0.87 $1.05 Construction $1,832 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 and Across Operating Segments Divid
Slide 23: Historical Net Sales
Historical Net Sales Our investments in adjacent products and markets have helped mitigate our exposure to a cyclical U.S. housing market over time. $2,200 2.0 $2,000 1.8 $1,800 1.6 $1,600 Housing Starts (M) 1.4 $1,400 1.2 $1,200 ($M) 1.0 $1,000 0.8 $800 0.6 $600 $400 0.4 $200 0.2 $0 0.0 2006 2007 2
Slide 24: Operating Income Margin Outperformance
Operating Income Margin Outperformance Simpson Historical Operating Income Margin Versus Proxy Peer Average(1) 30.0% 25.0% 23.3% 21.8% 19.9% 20.0% 16.5% 16.0% 19.9% 18.0% - 20.0%(2) 15.1% 14.2% 15.0% 13.7% 14.1% 13.8% 15.9% 13.2% 13.3% 14.4% 12.3% 12.0% 11.6% 12.5% 9.4% 9.9% 11.5% 10.0% 12.6% 9.5% 7
Slide 25: ROIC Within Top Quartile of Proxy Peers
ROIC(1) Within Top Quartile of Proxy Peers(2) 58.2% 29.7% 21.7% 21.1% 20.4% 18.9% 17.6% 15.3% 13.6% 11.8% 11.1% 9.4% 8.2% 7.8% 6.2% Source: Company filings as of February 24, 2023. (1) Return on Invested Capital (ROIC) reflects latest fiscal year reported. See appendix for ROIC definition. (2) Proxy
Slide 26: Well-Positioned to Drive Growth
Well-Positioned to Drive Growth We are well-positioned to execute our growth strategy given our demonstrated commitment to disciplined capital allocation and expense management. Thoughtful Deployment of Capital Improving SG&A as a % of Net Sales $995 $79 $44 28.9% 27.9% $811 25.6% $400 24.7% $206 $2
Slide 27: Capital Return History
Capital Return History $774.8 Million 2019 – 2022(1) Cumulative Free Cash Flow defined as: Cash flow from operations ($964.4 M) less Capital expenditures ($189.6 M) Repurchases of Quarterly Cash Common Stock Dividends 30.9% 21.4% (1) Time frame represents January 1, 2019 to December 31, 2022. 27
Slide 28: Use of Cash Priorities
Use of Cash Priorities Cash Flow From Operations Organic Growth • Prioritizing facility expansions (capacity, service, efficiencies and safety) • Investing in growth initiatives (engineering, marketing, sales personnel, testing capabilities, etc.) Acquisitions • Evaluating potential M&A in the marke
Slide 29: Acquisition Strategy
Acquisition Strategy • Strengthen our business model by expanding our product lines, end-use markets and developing complete solutions for the markets in which we operate • Improve our market share in our growth initiatives • Improve our manufacturing capabilities and efficiencies to reduce lead-tim
Slide 30: About ETANCO Group
About ETANCO Group Acquisition creates significant synergies to drive growth, profitability and cost efficiencies. ETANCO is a leading designer, manufacturer and distributor of fixing and fastening solutions for the building construction market in Europe Established in 1952 and headquartered in
Slide 31: ETANCO Group's Key Products and Applications
ETANCO Group’s Key Products and Applications Highly complementary product mix that expands into adjacent markets 1 2 3 4 Primary Waterproofing Roofing Facade Cladding Product Fixing membrane to avoid Fixing metal roof to a Fixing of protection panels Fixing metal, concrete or stone frameworks for wa
Slide 32: Sustainability and Environmental and Social Responsibility
Sustainability and Environmental and Social Responsibility SUSTAINABILITY EFFORTS ENVIRONMENTAL PROTECTION, TAKEN TO-DATE HEALTH & SAFETY MANAGEMENT POLICY • Issued inaugural ESG report in March 2020 • Reported updated metrics in March 2021 At Simpson Strong-Tie, we operate in addendum a safe and en
Slide 33: 5-Year Company Ambitions
5-Year Company Ambitions 1 Strengthen our values-based culture 2 Be the partner of choice 3 Be an innovation leader in the markets we operate 4 Continue above market growth rate relative to U.S. housing starts 5 Continue expanding our operating income margin to remain within the top quartile of prox
Slide 34: Appendix
Appendix 34
Slide 35: A Pioneer in Construction Solutions
A Pioneer in Construction Solutions Simpson structural connectors are the industry standard. EXPANSION INTO FIRST OPENED STEEL SHEAR WALLS HOLDOWN TYE GILB TEST LAB FIRST CONNECTOR EXPANSION INTO FASTENERS NYSE CONNECTOR LISTING MARKET LEADER (SSD) 1970 1994 1996 1999 2005 1956 1984 1997 2001 EXPANS
Slide 36: A Pioneer in Construction Solutions (Continued)
A Pioneer in Construction Solutions (Continued) Simpson is an innovation leader in fasteners, concrete repair, moment frames, construction software and structural steel solutions. EXPANSION INTO FURTHER EXPANSION INTO SPECIAL EXPANSION INTO EXPANSION INTO SS FASTENERS MOMENT FRAMES BUILDER & LBM OUT
Slide 37: Commitment to Innovation: State-of-the-Art Test Labs
Commitment to Innovation: State-of-the-Art Test Labs We are dedicated to research, testing, engineering and innovation through our state-of-the-art test labs, which provides us with a better understanding of how structures perform, advances our design technology and improves building safety. WOOD CO
Slide 38: Return on Invested Capital ("ROIC") Definition
Return on Invested Capital (“ROIC”) Definition When referred to in this presentation, return on invested capital (“ROIC”) for a fiscal year is calculated based on (i) the net income of that year as presented in the Company’s consolidated statements of operations prepared pursuant to generally accept
Slide 39: Strong Foundation. Stronger Future.
STRONG FOUNDATION. STRONGER FUTURE.
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