Stella-jones Inc. · TSX:SJ
Stella-jones — Investor Day (2025)
115 slides from Stella-jones's investor day presentation, 2025
Slide 1: 2025 Investor Day
STELLA JONES 2025 Investor Day Jy
Slide 2: Safety Instructions
Safety Instructions or
Slide 3: David Galison
David Galison Vice President, Investor Relations 3 3
Slide 4: Cautionary Statement
Cautionary Statement This presentation contains statements that are forward-looking in nature. The words “may”, “could”, “should”, “would”, “assumptions”, “plan”, “strategy”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “objective”, the use of the future and conditional tenses, and words
Slide 5: Eric Vachon
Eric Vachon President and Chief Executive Officer 5
Slide 6: Today's Agenda
Welcome & Strategic Update Eric Vachon, President & Chief Executive Officer Infrastructure Overview Utility Market Dynamics – Katherine Duff & Omar Saeed, Boston Consulting Group Wood Utility Poles - Kevin Comerford, Senior Vice President, Utility Poles Steel Structures - Pierre Lavoie, General Mana
Slide 7: Land Acknowledgement
Land Acknowledgement 7
Slide 8: Driving Sales Growth
Driving $3,469 Sales Growth (C$ millions) $157 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 8
Slide 9: [new logo]
• [new logo] 9 9
Slide 10: Stand tall, reach wide.
Stand tall, reach wide. 10
Slide 11: Laying the Foundation
Laying the Foundation: Strength Stability Breadth & Depth of Business Our infrastructure-focused vision is driving our strategic path forward. 11
Slide 12: Rooted in Infrastructure
Rooted in Infrastructure High-value, strategically-located, Other strong cash generating asset base Utility Poles Residential 3-Year Growth in Lumber Infrastructure Sales (2022 vs. LTM Q3 2025) Utility Poles • Replacing aging Other infrastructure, meet growing demand and increasing ~80% Utility Pole
Slide 13: Broadening Our Reach & Strengthening Our Balance Sheet
Broadening Our Reach & Strengthening Our Balance Sheet (LTM Q3 2025 since 2022) SALES GROWTH EBITDA(1) (2) GROWTH EARNINGS PER SHARE (EPS)(1) EBITDA MARGIN(1) (2) 330↑basis points GROWTH 14% 40% 45% On our way to return $130M Investment-grade $400M $500M rating growth capex bond offering to sharehol
Slide 14: Why We Win!
Why We Win! We are the supplier of choice with a loyal customer base. Quality Timely Products Delivery Value-Added Services 14
Slide 15: Located in Key Markets
Located in Key Markets Treating and manufacturing facilities Utility Poles Steel Structures Crossarms Railway Ties Residential Lumber Coal Tar Distillery 15
Slide 16: We Intend to Keep Growing.
SALES Compound Annual Growth Rate (CAGR) (1) 4-5% We Intend to Keep EBITDA MARGIN (2) 17.5 – 18.5% Growing. EPS CAGR ↑10%+ (1) Excluding future acquisitions 16 (2) This is a non-gaap ratio that has no standardized meaning under GAAP and is not likely to be comparable to similar measures presented by
Slide 17: Future Ready.
Future Ready. Refining core Reducing Mitigating Leveraging AI functions operational safety risks costs 17
Slide 18: Core to Our Growth: M&A
Core to Our Growth: M&A Strategic Investments Be the supplier of choice for our infrastructure customers 18
Slide 19: Supporting the Infrastructure that Connects our Communities.
Supporting the Infrastructure that Connects our Communities. 19
Slide 20: Wood Utility Poles $3B Total Addressable Market
Wood Utility Poles $3B Total Addressable Market (TAM) U.S. & CANADA (1) We are a leading industry supplier. 20 1) Major Consulting Practice, July 2025
Slide 21: Steel Structures $1.5B TAM
Steel Structures $1.5B TAM U.S. & CANADA (1) An Opportunity to Seize. 21 1) Major Consulting Practice, July 2025
Slide 22: Doubling Capacity
Doubling Invested in Capacity capex to reach 20,000 tons of capacity ~$55M to $100M+ in annual sales 22
Slide 23: Tubular Steel $3.5B TAM
Tubular Steel $3.5B TAM U.S. & CANADA (1) An untapped opportunity. 23 (1) Major Consulting Practice, July 2025
Slide 24: M&A: Expanding Our Network
M&A: Expanding Our Network We are the supplier of choice with a loyal customer base. Alternate Pole Materials Pole Hardware Alternate Crossarm Materials Substation Structures Inspection & Maintenance Vegetation Maintenance 24
Slide 25: Confidently Expanding Our Offering & Entering Adjacent Markets
Confidently Expanding Our Offering & Entering Adjacent Markets Steel Structures LATTICE TOWERS & MONOPOLES Structural Pole Fixtures WOOD CROSSARMS & HARDWARE 25
Slide 26: Railway Ties 18-20M Ties TAM
Railway Ties 18-20M TIES TAM U.S. & CANADA (1) TIES YOU CAN TRUST 26 26 (1) Railway Tie Association
Slide 27: Assessing the Opportunities
Assessing the Opportunities Our Proven and Consistent Set of Criteria: Accretive Investments to Expand Dedicated to a Strong Return Our Current Portfolio on Capital Employed Strategic Value Market Operational Fit Sustainable, Dynamics Long-term, Financial Returns 27
Slide 28: Stand tall, reach wide.
Stand tall, reach wide. Leveraging scale, Focused on the next We have the right team, relationships, experience, and phase of growth, both driven to achieve the next network to expand into higher organic and M&A phase of our journey value markets 28
Slide 29: Kevin Comerford
Kevin Comerford Senior Vice-President, Utility Poles 29
Slide 30: A Leading Supplier of Wood Poles in North America
A Leading Supplier of Wood Poles in North America 30
Slide 31: Strong Sales Growth
Strong Sales Growth Wood Utility Poles(1) Sales Growth (C$ millions) $1,705 $1,720 12% $1,571 $1,227 CAGR since 2022 2022 2023 2024 LTM Q3 2025 31 (1) Excluding Locweld Inc. acquisition
Slide 32: Meeting the Demands of the North American Electricity System
Meeting the Demands of the North American Electricity System ~185 million 3 million+ Total wood poles (1) poles installed annually (1) 32 (1) Major Consulting Practice, July 2025
Slide 33: Growth Drivers
Growth Drivers DEFERRED MAINTENANCE INCREASED USE & WEATHER EVENTS 40-45% • System Hardening & Resiliency • Load Growth of distribution assets • Reshoring of Manufacturing are near or beyond their useful life (1) • Renewables • Electrification 33 (1) Major Consulting Practice, July 2025
Slide 34: With Increasing Demand, Poles Need to Bear More Weight
With Increasing Demand, Poles Need to Bear More Weight Poles need to be thicker, taller or both 1.829m (5 ft) 1 class = 15%+ 5’ = 15%+ increase volume increase length volume increase Class 4 Class 3 Class 3 Class 3 34
Slide 35: Location, Location, Location
Location, Location, WESTERN RED CEDAR Location DOUGLAS FIR RED PINE SOUTHERN YELLOW PINE 35
Slide 36: Location, Location, Location
Location, Location, WESTERN RED CEDAR Location DOUGLAS FIR RED PINE SOUTHERN YELLOW PINE Pole Treating Pole Peeling Distribution Yards 36
Slide 37: Our Competitive Advantage
Our Competitive Advantage EXTENSIVE UNIQUE AGILITY & DEEP & DURABLE NETWORK & LOGISTICS RELATIONSHIPS UNMATCHED REACH 37
Slide 38: Investing in Reliable Supply & Quality
Investing in Reliable Supply & Quality INVESTING IN PRIORITIZING LONG- COMMITTED TO TRUSTED TO MEET CAPACITY TERM CUSTOMERS SUPPLY LONG-TERM EXPANSION CONTRACTS 38
Slide 39: Using Technology to Optimize our Business
Using Technology to Optimize our Business Drive efficiency Reduce input costs & minimize waste Speed decision making & track key performance metrics Focus on using technology to improve both the class and number of wood poles we get from the same volume of raw material. 39
Slide 40: Stand tall, reach wide.
Stand tall, Alternate Pole Materials reach wide. Pole Hardware Alternate Crossarm Materials Exploring opportunities Substation Structures adjacent to our core business Inspection & Maintenance Vegetation Maintenance 40
Slide 41: Acquiring a Long-Standing, Proven Supplier
Acquiring a Long-Standing, Proven Supplier Brooks Meets Our Strict Evaluation Criteria Strategic Value Markets Dynamics • Builds on our existing • Maintenance driven with infrastructure offering recurring demand Operational Fit Financial • Geographic expansion • ROCE > Cost of Capital potential • St
Slide 42: Never Been Better Positioned For Growth.
Never Been Better Positioned For Growth. The Right Network The Right Customers The Right Opportunity 42
Slide 43: Pierre Lavoie
Pierre Lavoie General Manager, Steel Structures 43
Slide 44: 75+ years
75+ years STEEL LATTICE MONOPOLES ROCK ANCHOR 44
Slide 45: Our Award-Winning Culture
Our Award-Winning Culture Continuous Improvement Sustainability Health & Safety 45
Slide 46: A Leading Supplier
STEEL LATTICE A Leading Supplier 100,000+ steel lattice towers built to date, equivalent to over 32,000 KM of transmission lines 46
Slide 47: Serving the Quebec & Ontario Markets
MONOPOLES Serving the Quebec & Ontario Markets We manufacture the largest monopoles in Canada (up to 252 feet high with a base diameter of 13 feet) 47
Slide 48: A strong offering to wood utility pole customers
ROCKANCHOR A strong offering to wood utility pole customers 48
Slide 49: 220,000 sq. ft.
220,000 sq. ft. 8,000-10,000 tons of annual capacity Capacity is set to double to 20,000 tons by mid-2026 CANDIAC, QC 49
Slide 50: Industry Trends
North American Electric Transmission Capital Spend (1) $M USD Industry Trends $120,000 +9.1% CAGR $100,000 North American Transmission CAPEX 9% $80,000 +6.3% $60,000 CAGR $40,000 $20,000 2023-2024 $0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 50 (1) Power Insights, Au
Slide 51: Investor-Owned Utilities in the U.S.
Investor-Owned Utilities (“IOU”) in the U.S. (1) 15% $275B USD Total CAPEX [2024] CAPEX CAGR Total IOU CAPEX Spend $31B (2024-2029) (2024-2029) 51 (1) Power Insights, August 2025
Slide 52: Canadian Utilities
Canadian Utilities 6% $6B USD growth in CAPEX in transmission lines in 2024 (1) 2024-2029 (1) 52 (1) Power Insights, August 2025
Slide 53: Competitive Landscape
Competitive CANDIAC, QC Landscape 53
Slide 54: Growth and Market Opportunities
Growth and Market Opportunities Steel Structures Market (1) STEEL LATTICE MONOPOLES $5B 1 $1.5B market $3.5B market(1) Higher voltage Higher production transmission costs, lower install and maintenance costs Lower up-front costs, higher install and maintenance costs 54 (1) Major Consulting Practice
Slide 55: Our Competitive Strengths
Our Competitive Strengths Design, manufacturing, shipping, assembly Precision, quality, service, delivery The “local” option with long-standing Tier 1 customers 55
Slide 56: Why We Win Together
Why We Win Together Clear Alignment Access to Resources We both value quality, service, Ready to grow more health and safety, and continuous improvement Customers Similar customer lists with cross-selling opportunities 56
Slide 57: Growing Together
Growing Together Funding Our Next Phase of Growth New state-of-the-art equipment Investing in capacity and technology 60% improvement in efficiency 20,000 tons of capacity 57
Slide 58: The Right Time
The Right Time The Right Resources The Right Investment The Right Opportunity 58
Slide 59: Sylvain Couture
Sylvain Couture Vice President & General Manager Railway Ties 59
Slide 60: A Core Business
A Core Business LTM Q3 2025 Sales by Product Category Other An Industry Leader Utility Poles in the manufacture & Residential distribution of: Lumber • Wood railway crossties • Switch ties • Bridge timbers ~25% Railway • Prefabricated bridges Tie Sales • Crossing panels • Pre-plated products Railway
Slide 61: A Broad Network, Delivering at Scale
A Broad Network, Delivering at Scale 10 facilities dedicated to railway ties Sourcing from ~600 sawmills Located near our customers for optimal service Tie Treating Tie Procurement Yard 61
Slide 62: Meeting the Demands of the North American Railways
Meeting the Demands of the North American Railways ~500 million wood ties across North America (1) 18-20 million wood ties installed annually (1) 90% replacement 10% new ties (1) Railway Tie Association 62
Slide 63: 10M+ ties
We have the capacity to supply 10M+ ties each year
Slide 64: Meeting Large-Scale Maintenance Needs
Meeting Large-Scale Maintenance Needs Share of North American Track Miles (1) ~140,000(1) Track miles 32% 35% Class 2 & 3, Commercial 68% Class 1 65% (1) Association of American Railroads, 2020 64
Slide 65: North American Crosstie Competitive Dynamics
North American Crosstie Competitive Dynamics Class 1 Railway We compete on Market Characteristics • Utilize multiple suppliers with no single sourcing quality, • Reliable suppliers availability & • Quality, long-lasting products • Product availability key service • Rapid delivery on demand 65
Slide 66: Procurement specialists, ~600 sawmills
25 procurement specialists ~600 sawmills Experience and expertise in balancing customer requirements with availability of supply 66
Slide 67: Delivering millions of ties 24/7, where and when they are needed
Delivering millions of ties 24/7, where and when they are needed 67
Slide 68: Maintenance Drives Steady, Modest Demand
Maintenance Drives Steady, Modest Demand 12-month Rolling Crosstie Purchases (annualized) (1) (thousands) 1.4% 30,000 25,000 20,000 15,000 average annual 10,000 industry growth 5,000 - Jan-08 Jan-14 Jan-18 Jan-10 Jan-15 Jan-11 Jan-12 Jan-16 Jan-19 Jan-21 Jan-13 Jan-17 Jan-20 Jan-23 Jan-22 Jan-24 Jan
Slide 69: Multiple Opportunities to Grow
Multiple Opportunities to Grow Shipping larger volumes Acquiring organizations to our customers with adjacent products and/or services • Alternate tie materials Offering a broader range of higher value solutions • Bridges • Automation • Turnouts • Pre-plating • Preservatives 69
Slide 70: Securing Greater Share of Routine Maintenance
Securing Greater Share of Routine Maintenance Our Opportunity • Identifying efficiencies • Optimizing our footprint • Investing in capital projects to enhance customer's business model • Offering treated-services only • Balancing value for customer with risk management 70
Slide 71: Always Innovating to Solve Customer Needs
Always Innovating to Solve Customer Needs Pre-plating ties Wood treatment alternatives End-of-life solutions 71
Slide 72: Looking beyond wood & evaluating alternative materials
Growing Through Acquisition Looking beyond wood & evaluating alternative materials 72
Slide 73: Modernizing our Operations for Continuous Improvement
Modernizing our Operations for Continuous Improvement Driving • Leverage lean manufacturing performance • Optimized planning, through collaboration and quality efficiency • Implementing robotics & AI to power data- driven improvements Improved Yield and Safety 73
Slide 74: Remaining Top of Mind
Remaining Top of Mind LEADING UNIQUE AGILITY REPUTATION ADVOCACY & OPERATIONAL FOR QUALITY & INNOVATION FOOTPRINT SERVICE 74
Slide 75: Scale, Reach, Track Record, Relationships
Scale Reach Track Record Relationships 75
Slide 76: Investor Day
STELLA JONES 2025 Investor Day Jy
Slide 77: Wesley Bourland
Wesley Bourland Senior Vice-President and Chief Operations Officer 77
Slide 78: Wesley Bourland
Wesley Bourland Senior Vice-President and Chief Operations Officer 78
Slide 79: Wesley Bourland
Wesley Bourland Senior Vice-President and Chief Operations Officer 79
Slide 80: Wesley Bourland
Wesley Bourland Senior Vice-President and Chief Operations Officer 80
Slide 81: Wesley Bourland
Wesley Bourland Senior Vice-President and Chief Operations Officer 81
Slide 82: Wesley Bourland
Wesley Bourland Senior Vice-President and Chief Operations Officer 82
Slide 83: Wesley Bourland
Wesley Bourland Senior Vice-President and Chief Operations Officer 83
Slide 84: Wesley Bourland
Wesley Bourland Senior Vice-President and Chief Operations Officer 84
Slide 85: Wesley Bourland
Wesley Bourland Senior Vice-President and Chief Operations Officer 85
Slide 86: Wesley Bourland
Wesley Bourland Senior Vice-President and Chief Operations Officer 86
Slide 87: Wesley Bourland
Wesley Bourland Senior Vice-President and Chief Operations Officer 87
Slide 88: Rhiannah Carver
Rhiannah Carver Senior Director of Project Management & Sustainability 88
Slide 89: We Are On the Right Path
We Are On the Right Path CONSISTENT KEY TO ROI POSITIVE RESILIENT, STRATEGY OUR BUSINESS PROJECTS SOCIALLY-JUST, & EQUITABLE Sustainability at Stella-Jones extends beyond a set of objectives 89
Slide 90: Our Three Areas of Focus
Our Three Areas of Focus Climate Change & Indigenous Peoples ESG Risk Governance GHG Emissions Health and Safety Our People Responsible Supply Chain 90
Slide 91: Reducing GHG
Reducing GHG Climate Change & 32% 2.5MW GHG Targets reduction Installed solar capacity by 2030 compared to 2022 91 91
Slide 92: ROI-positive Project Types
5 ROI-positive Project Types: Renewable Transport Energy Biomass Electrification Energy Optimization Efficiency & Energy Monitoring Committed to reducing our emissions intensity and maximizing the carbon sequestered in our products 92
Slide 93: Partnering with Indigenous Peoples
Partnering with Indigenous Peoples Our Shared Strategy: Protecting & growing Investment in our fibre volumes Lizzie Bay Logging • LOI to 5 priority Bands • 1/3 ownership stake alongside • 1 MOU in process 3 Indigenous Bands • Fostering community, economic • Expected completion in Q4 2025(1) opportun
Slide 94: Continued Governance
Continued Governance A Solid Foundation Monitoring Assessing of Risk Ownership Human Rights Biodiversity risks & Opportunities Clear expectations for suppliers Analyzing water stress, critical on fair labour and working conditions habitat, protected areas, forest loss and habitat connectivity Embedd
Slide 95: Stand Tall. Reach Wide.
Stand Tall. Reach Wide. Building trust and confidence by doing the right thing, today and for years to come. 95 95
Slide 96: Silvana Travaglini
Silvana Travaglini Senior Vice-President & Chief Financial Officer 96
Slide 97: We Hold a Leading Position in Our Markets
We Hold a Leading Position in Our Markets Strong Secular Recurring, Highly Cash Flow Stable, Long-Term Tailwinds Maintenance- Generative Contracts Driven Demand 97
Slide 98: Sales
Sales (C$ Millions) Sales from 4.5% infrastructure CAGR On track to deliver WOOD UTILITY ↑ 80% $3,495 POLES(1) ~$3.5B in sales $3,469 $3,319 in 2025 12% $3,065 (LTM Q3 2025) CAGR SINCE 2022 69% RAILWAY TIES 25 consecutive years of top-line growth 4% CAGR SINCE 2022 (2022) 2022 2023 2024 LTM Q3 2025
Slide 99: EBITDA Margin
EBITDA Margin (1) 330 BPS 2025 EBITDA(1) CAGR Driven by: TARGET 9% • Strength in higher 18.3% 18.2% 17.9% margin utility poles since 2022 14.6% • Scale and efficiencies Delivered results: LTM Q3 2025 EBITDA(1) CAGR • Despite inflationary pressure, more 12% since 2022 competition, macro uncertainty (
Slide 100: EPS
EPS (C$ per Share) 13% CAGR Earnings growth Driven by: $5.62 $5.66 $5.72 outpaced topline growth • Profitable growth $3.93 • Share buybacks EPS outpaced both earnings and topline (1) 2022 2023 2024 LTM Q3 2025 (1) Excluding a pre-tax insurance settlement gain of $28M ($21M net of tax) 100
Slide 101: Meaningful Cash Flow Generation
Meaningful Cash Flow Generation Cash Flows from Operating Activities (C$ Millions) $513 Free Cash Flow(1) $408 ~$600M since 2023 $107 2023 2024 LTM Q3 2025 101 (1) This is a non-GAAP measure that has no standardized meaning under GAAP and is not likely to be comparable to similar measures presented
Slide 102: Returning Capital to Shareholders
Returning Capital to Shareholders Annual Dividend Increases (C$ per Share) 11% 22% $1.24 15% $1.12 $300M+ $0.92 $0.80 Share Repurchase (2023-2025) 2022 2023 2024 Q3 2025 (annualized) 102
Slide 103: Disciplined Investments in our Business
Disciplined Investments in our Business Investments Dividends & Acquisitions Since 2022 (1) share buybacks • Maintained inventory 42% 30% $350M • Invested in facilities • Expanded capacity Acquisitions • Completed strategic 20% acquisitions $325M 8% Utility poles growth Maintenance capex Capex capex
Slide 104: New Three-Year Objectives
New Three-Year Objectives Rolling 3-year objectives to dynamically reflect M&A activity Introduction Today’s Target of New Targets End Date TODAY DEC 2028 FEB 2027 FY 2029 Targets through 2029 Feb 2028 FY 2030 Targets through 2030 104
Slide 105: New Three-Year Targets
New Three-Year Targets Sales EBITDA MARGIN(1) EPS 4-5% 17.5-18.5% ↑10%+ Wood Utility Poles ~50% of sales, mid-single digit growth CAGR 2025-2028 CAGR 2025-2028 Locweld & Brooks ~$225M of annual revenue Driven in part by operational Supported by multiple Railway Ties Low-single digit growth efficienc
Slide 106: Core End Markets Driving Top Line Growth
Core End Markets Driving Top Line Growth ~$4,000M 4-5% CAGR $225M 2-3% p.a. 4-6% p.a. ~$3,500M FY 2025 Sales Guidance Wood Utility Poles Railway Ties Completed Acquisitions FY 2028 Sales Objective 106
Slide 107: Financial Flexibility to Capitalize on Growth Opportunities
Financial Flexibility to Capitalize on Growth Opportunities 50% EBITDA/Free Cash Flow Conversion Rate(1) 107 (1) This is a non-GAAP ratio that has no standardized meaning under GAAP and is not likely to be comparable to similar measures presented by other issuers. Please refer to “Non- GAAP and Othe
Slide 108: Our Disciplined Capital Allocation Priorities
Our Disciplined Capital Allocation Priorities Maintenance Capex Free Cash Flow(1) Invest to maintain Strategic Growth Consistent Share the network Opportunities Dividend Repurchases • ~2.5% of sales Investing in growth capex Target: 20%-30% of Based on M&A activity • $85-$95M of annual prior year EP
Slide 109: Our Value Creation Priorities are Clear
Our Value Creation Priorities are Clear We remain focused on driving long-term value for shareholders. 109
Slide 110: Question Session
Question Session 110
Slide 111: Stand tall, reach wide.
Stand tall, reach wide. 111
Slide 112: Appendix
STELLA JONES Sj 12
Slide 113: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures Earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA margin, net debt-to-EBITDA ratio and return on average capital employed (“ROCE”) are non-GAAP financial measures and non-GAAP ratios. Such measures are not prescribed by Internatio
Slide 114: Non-GAAP and Other Financial Measures (Cont'd)
Non-GAAP and Other Financial Measures (Cont'd) A reconciliation of the most directly comparable financial measure has been provided below: Reconciliation of Cash Flows From Operating Activities to Free Cash Flow Trailing twelve months ended (C$ millions) September 30, 2025 Cash flows from operating
Slide 115: Non-GAAP and Other Financial Measures (Cont'd)
Non-GAAP and Other Financial Measures (Cont'd) EBITDA and EBITDA margin for the trailing twelve months as at September 30, 2025 (exclude the gain on insurance settlement) EBITDA and EBITDA margin for the trailing twelve months as at September 30, 2025 exclude the gain on insurance settlement. These