Slide 1: Q2 2021 Earnings Presentation
Dave Flitman, CEO | Peter Jackson, CFO BLDR.com
Slide 2: Safe Harbor & Non-GAAP Financial Measures
Safe Harbor & Non-GAAP Financial Measures Cautionary Notice • Statements in this presentation and the schedules hereto that are not purely historical facts or that necessarily depend upon future events, including statements about expected market share gains, forecasted financial performance or other
Slide 3: Benefitting From Favorable Industry Trends
Benefitting From Favorable Industry Trends 10.0 Annual Average Rate on 30-year Fixed-Rate Mortgages Market Trends Support Further Upside 9.0 8.0 7.0 Single-family 6.0 Mortgage rates housing starts and % 5.0 remain near homes under 4.0 January 2021 construction 3.0 record low continue on robust 2.0 u
Slide 4: Highlights of Record Q2 2021 Results
Highlights of Record Q2 2021 Results Record Sales Performance Net sales $5.6b • Focused execution, accelerating demand, and increasing prices drove record results +90.6% YoY • Improving housing starts, low mortgage rates and strong demand for single family (+35.3% Core Organic1) living remain tailwi
Slide 5: Expect to Deliver 10%+ Adjusted EBITDA Margin on 2021E Base Business
Expect to Deliver 10%+ Adjusted EBITDA Margin on 2021E Base Business1 …The Majority of our EBITDA Growth is Driven by Value-Added Products Over 60% of BFS’s Base Business1 is Non-Commodity… and Sustainable Operations Improvement / Synergy Windows, Doors & Millwork Lumber & Lumber Sheet Goods Base bu
Slide 6: Alliance Acquisition Aligned with Growth Strategy
Alliance Acquisition Aligned with Growth Strategy Transaction Announcement: May 2021 | Purchase Price: ~$400 Million Geographic Footprint, Value-Added Offerings, and Market Leadership Create a Highly Strategic Fit for Builders FirstSource’s Integrated Network Alliance Acquisition Overview #1 in Ariz
Slide 7: Construction is Among Least Digitized Sectors
Construction is Among Least Digitized Sectors Industry Digitization Index Well-Positioned to Lead a Digital Transformation in Homebuilding 1 McKinsey estimates 7 | © 2021 Builders FirstSource. All Rights Reserved 2 Information & Communication Technology
Slide 8: Paradigm Acquisition Bolsters Digital Capabilities
Paradigm Acquisition1 Bolsters Digital Capabilities Transaction Announcement: June 2021 | Purchase Price: ~$450 Million | Est. 2021 Revenue: $50 Million The Company will pursue three key priorities with Strategic Rationale & Commentary Paradigm: • Paradigm has proven capabilities and technology in d
Slide 9: Paradigm Business Overview
Paradigm Business Overview Digital Capabilities Software Revenue Mix & Positioning • Software development and consulting services that help industry participants boost sales and become more efficient • 2020 product launches: • A simplified process for configuring, estimating, and manufacturing compl
Slide 10: Our Digital Platform will Fuel Long-Term Growth
Our Digital Platform will Fuel Long-Term Growth Monetizing The Opportunity Strategic Direction • $1B of revenue growth in the next 5 years • Homebuilding and the sourcing of material is going digital • Increased Software Licensing revenue from • $120B of annual material spend enhanced sales channel
Slide 11: Pursue Accretive Tuck-in M&A
Pursue Accretive Tuck-in M&A 500+ US Building Products Businesses Totaling ~$80B in Sales Mapped • Broaden product portfolio in target Geographic markets Scale • Deepen presence in existing service areas by expanding product portfolios • Enhance opportunities to partner with Value Add customers Prod
Slide 12: Synergy Target One Year Ahead of Schedule
Synergy Target One Year Ahead of Schedule Estimated Run-Rate Cost Savings of ~$150m(1) Major Milestones ($ in millions) Focus On Customers And Employees $140m to $160m • Leadership changes finalized and turnover remains well managed and stable • First Wave of ERP conversions successfully completed N
Slide 13: Q2 2021 - Broad Strength Across Product Portfolio
Q2 2021 - Broad Strength Across Product Portfolio Net sales by product category (Q2 2021 compared to combined pro forma Q2 2020) ($M/ % change) Specialized Products: Lumber & Lumber Value-Added Products: Sheet Goods: Manufactured Window, Doors & Siding, Metal & Gypsum, Roofing & Products Millwork Co
Slide 14: Q2 2021 Core Organic Sales Growth Across All End Markets
Q2 2021 Core Organic Sales Growth Across All End Markets coupled with High EBITDA Conversion rate of Sales Net sales bridge2 (Q2 2021 compared to combined pro forma Q2 2020) ($M) Q2 2020 Non-Commodity Commodity Q2 2021 1,516 1,135 5,577 +35.3% Core Organic 2,926 +3.5% Acquisitions Repair & EBITDA hi
Slide 15: Strong Balance Sheet and Liquidity Provide Financial Flexibility
Strong Balance Sheet and Liquidity Provide Financial Flexibility Pro Forma Net Leverage1 Improvement Balanced Capital Allocation Priorities Debt upgraded by 1. Maintain a strong balance sheet; July $1 billion debt offering at 4 ¼% Moody’s and S&P 2. Reinvest in our business to drive growth and produ
Slide 16: Raised 2021 Outlook
Raised 2021 Outlook 2021 Full Year Financial Expectations Metrics Current Guidance Prior Guidance 2020 Pro Forma Baseline Sales1 (YoY Growth) $18.0 to $19.0 billion (+41% to +48%) $16.0 to $17.0 billion (+25% to +33%) $12.8 billion Adjusted EBITDA2 (YoY Growth) $2.2 to $2.4 billion (+105% to +124%)
Slide 17: Differentiated Market Leader Positioned for Above Market Growth
Differentiated Market Leader Positioned for Above Market Growth and Expanding Profitability Leadership in a highly fragmented industry Exceptional geographic, customer, and end market diversity Strategic investment in value-added capacity, driving share gains and margin expansion Focus on maintainin
Slide 18: Question & Answer Session
Question A n swe r Session 18 | © 2021 Builders FirstSource. All Rights Reserved
Slide 19: Investor Relations Contact
Michael Neese SVP, Investor Relations Michael.Neese@bldr.com 214-765-3804 19 | © 2021 Builders FirstSource. All Rights Reserved. www.bldr.com
Slide 20: Base Business Sales and Adj. EBITDA projection by commodity price
Base Business 1 Sales and Adj. EBITDA projection by commodity price Illustrative FY 2021E Assumptions: AEBITDA • Provided a grid with various commodity cost assumptions and Sales ($Bn) ($Bn) the corresponding profits if you assume static commodity prices. Please keep in mind that shorter term price
Slide 21: Reconciliations
Reconciliations 21 | © 2021 Builders FirstSource. All Rights Reserved.
Slide 22: Reconciliations
Reconciliations 22 | © 2021 Builders FirstSource. All Rights Reserved.
Slide 23: Reconciliations
Reconciliations BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Six Months Ended June 30, 2021 2020 (Unaudited) (In thousands) Cash flows from operating activities: Net income $ 669,815 $ 87,691 Adjustments to reconcile net income to net cash (used in) prov
Slide 24: Reconciliations
Reconciliations 24 | © 2021 Builders FirstSource. All Rights Reserved.
Slide 25: Reconciliations
Reconciliations 25 | © 2021 Builders FirstSource. All Rights Reserved.
Slide 26: Reconciliations
Reconciliations 26 | © 2021 Builders FirstSource. All Rights Reserved.
Slide 27: Reconciliations
Reconciliations 27 | © 2021 Builders FirstSource. All Rights Reserved.
Slide 28: Reconciliations
Reconciliations 28 | © 2021 Builders FirstSource. All Rights Reserved.