Ufp Industries, Inc. · NASDAQ:UFPI
Ufp Industries — Q3 2024 Earnings Presentation
34 slides from Ufp Industries's earnings presentation, Oct 29, 2024
Slide 1: Investor Relations Presentation: Results through September 28, 2024
1 INVESTOR RELATIONS PRESENTATION Deckorators Voyage Decking Results through September 28, 2024 with Surestone Technology
Slide 2: Forward-looking statements and non-GAAP information
UFP INDUSTRIES, INC. Please be aware that statements included in this presentation that are not historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, and are based on management’s beliefs, assumptions, current expectations, estimates,
Slide 3: No mission statement. Just people on a mission.
The operating segments of UFP Industries – UFP Packaging, UFP Construction and UFP Retail Solutions – convert 7% of North American softwood lumber, manufacturing and selling a wide variety of value-added products used in residential and commercial construction, outdoor living, packaging and other in
Slide 4: 5 Year Performance
4 UFP Industries is focused on driving above market growth and compounding margins higher over time while maintaining best-in-class ROIC. 5 YEAR PERFORMANCE* +20% ~7% +400bps ~14% ~27% Average Annual Expansion in Average Annual Average Annual Average Annual Unit growth adjusted EBITDA ROIC Growth TS
Slide 5: U.S. Softwood Consumption by End Markets and UFP Revenue by Segment
5 TOTAL U.S. SOFTWOOD UFP TTM REVENUE BY CONSUMPTION BY END MARKETS* BUSINESS SEGMENTS IMPROVEMENTS 19.5B board feet $2.6B INDUSTRIAL 11.2B board feet $1.7B CONSTRUCTION 19.8B board feet $2.1B *Source: Forest Economic Advisors. Improvements = Retail. Industrial = Packaging 5
Slide 6: Objectives and Strategies
6 OBJECTIVES Product & Process Market Expansion Unit Sales Growth Margin Growth Innovation STRATEGIES Growth Mix Improvements Ops Improvements M&A NEW PRODUCTS AUTOMATION & ROBOTICS • Core tuck-ins, consolidations • Long-term goal of 10% of net sales • Enhance productivity and • Complementary value-
Slide 7: UFP at a Glance
UFP AT A GLANCE 1955 15,000+ 221 $6.7B $715.6M Founded in Grand Employees Facilities Q3 2024 TTM Net Q3 2024 TTM Rapids, MI worldwide worldwide Sales Adjusted EBITDA Business segments and markets Based on Q3 2024 TTM Net Sales $2.6B $1.7B Big box, independents, & buying co-ops Industrial manufacture
Slide 8: Where We Are
WHERE WE ARE 221 Locations 9 Countries 8
Slide 9: Business Model Provides Sustainable Competitive Advantages
BUSINESS MODEL PROVIDES SUSTAINABLE COMPETITIVE ADVANTAGES Scale through Incentives Aligned Commitment To Culture Structure Diversification With Shareholders Innovation As North America’s largest Each of our 221 operations Teamwork, accountability, buyer of softwood lumber, While in its early stages
Slide 10: Long-Term Financial Goals
LONG-TERM FINANCIAL GOALS Earn an incremental Annual unit sales Maintain a Achieve and sustain return on new growth of 7-10% conservative capital a 12.5% adjusted investment including small structure < 1.5X EBITDA margin greater than our 15% acquisitions Adjusted EBITDA hurdle rate 10
Slide 11: Value-Added Sales
VALUE-ADDED SALES Value-added as a percent of sales Commodity Value-added EBITDA Margin 69% 69% 59% 60% 41% 40% 31% 31% 9.7% 10.7% 7.2% 2013 3% 2011 2019 2021 Q3 2024 TTM PalletOne and Spartanburg Forest Products acquisitions Value-added products improve mix, raise EBITDA margins. New products sales
Slide 12: Alternative Materials Manufacturing Growth
12 ALTERNATIVE MATERIALS MANUFACTURING GROWTH Investments in value-added adjacencies add to TAM Core/Historical Current state/Future scaling growth via capex and M&A CONSTRUCTION Wood Components Light Gauge Metal Components Aluminum Balconies and accessories RETAIL Pressure-Treated Lumber Deckorator
Slide 13: Innovation and New Products, UFP Venture Fund
INNOVATION AND NEW PRODUCTS UFP VENTURE FUND In 2022 we launched our In 2023 we started the Innovation Accelerator to: UFP Venture Fund to: Spur external growth through Bring new products and services to late-stage development and early-stage market faster commercialization opportunities Empower ent
Slide 14: Business Segments
BUSINESS SEGMENTS Q3 2024 TTM Net Sales Q3 2024 TTM Net Sales Q3 2024 TTM Net Sales Site Built $923 Million ProWood Group Structural Packaging $2.2 Billion $1.1 Billion Factory Built $793 Million Deckorators PalletOne Commercial $2.6B $299 Million $1.7B $522 Million $2.1B $250 Million UFP Edge Prote
Slide 15: Retail: Treated & Deck Specialties, Fence, Lawn & Garden
TREATED & FENCE, LAWN BUILDING DECK SPECALTIES & GARDEN MATERIALS Wood- and mineral-based Premium siding, Pressure-treated lumber, Wood and vinyl fence, ProWood FR, project panels, composite decking, railing pattern, trim; interior decking, handrail, stairs, planters, garden beds, short boards & dim
Slide 16: Packaging: Structural, PalletOne, Protective
Structural Packaging PalletOne Protective Packaging Wood, steel, foam and corrugated for mixed material crates Machine-built pallets; design, Corrugated conversion, stretch/shrink films, labels, and specialty containers; hard cases, lumber processing, engineering and testing strapping, hardware and
Slide 17: Construction: Site-Built, Factory-Built, Commercial, Concrete Forming
Site-Built Factory-Built Commercial Concrete Forming Roof trusses, wall panels, floor Floor, wall and roof panels, cabinet Turnkey project management of Offsite prefabrication of value-add systems and framing services for components, countertops and consumer environment and formwork, aluminum horizo
Slide 18: Segment Demand and Forward Outlook
SEGMENT DEMAND AND FORWARD OUTLOOK MACRO DRIVERS • Repair and remodel activity • PMI • Affordability challenges remain • Aging home stock • Durable Goods • Housing shortage at historical • Home equity at historic highs • GDP high • Home equity at historic highs • Demand decrease across most • Averag
Slide 19: Sustainability Continuum
SUSTAINABILITY CONTINUUM We believe profitability, asset values and shareholder return are optimized by acting responsibly, and that our investors experience higher sustainable returns when we support our customers, employees and communities. Our views on ESG and maintaining a sustainable enterprise
Slide 20: Financials
FINANCIALS (§) UFP INDUSTRIES
Slide 21: Our Performance
OUR PERFORMANCE Net Sales Adjusted EBITDA Adjusted EBITDA Margin $ in Millions 31% 2020 28% 94% 6% 2% 2021 (9)% (4)% 36% (26)% (12)% 2022 $5,154 $8,636 $9,627 $7,218 $6,715 $431 $835 $1,097 $810 $716 8.4% 9.7% 11.4% 11.2% 10.7% Net Earnings (ACI) ROIC Capital Resources 2023 29% Liquidity Q3 2024 117
Slide 22: Managing Lumber Market Risk
MANAGING LUMBER MARKET RISK 50% 50% Level of lumber prices does 39.9% 39.9% Lumber Market Volatility* Adjusted EBITDA Margin not drive profitability 40% 40% 34.5% Sequential trends impact 30% 30% profit per unit 20% 20% Balanced mix of variable and fixed- 11.4% 11.2% 9.7% 10.7% price products mitiga
Slide 23: Net Sales
NET SALES (in millions) UFP Consolidated UFP Retail Solutions $9,627 $3,771 $8,636 $3,535 $7,218 $2,956 $6,715 $2,599 28% $2,234 $5,154 31% 25% 6% 2% 24% 0% 5% (4)% (4)% (6)% (10)% 4% (9)% (4)% (1)% (3)% (6)% (10)% (10)% 2020 2021 2022 2023 Q3 2024 TTM 2020 2021 2022 2023 Q3 2024 TTM UFP Packaging U
Slide 24: Adjusted EBITDA
ADJUSTED EBITDA (in millions) UFP Consolidated $1,097 UFP Retail Solutions $217 $835 $810 $208 $211 $716 $198 $431 11.4% 11.2% 10.7% $186 8.1% 9.7% 7.0% 8.4% 5.6% 5.8% 8.3% 2020 2021 2022 2023 Q3 2024 TTM 2020 2021 2022 2023 Q3 2024 TTM UFP Packaging $376 UFP Construction $422 $300 $244 $283 $272 $2
Slide 25: Adjusted EBITDA Growth and Unit Sales
ADJUSTED EBITDA GROWTH AND UNIT SALES UFP Consolidated UFP Retail Solutions 100% 94% 160% 127% 80% 120% Percent Growth Percent Growth 60% 36% 28% 80% 40% 31% 31% 20% 6% 2% 40% (4)% 10% (4)% 1% 0% (9)% 25% 0% 6% -20% (12)% 0% (6)% (10)% (26)% -40% -40% 2020 2021 2022 2023 Q3 2024 2020 2021 2022 2023
Slide 26: Balanced Use of Free Cash Flow
BALANCED USE OF FREE CASH FLOW Acquisitions to contribute Operating Cash Flow and Capital Allocation half of our total annual (in millions) unit sales growth Acquisitions CapEx plan of $250-300M in 2024 Capex Share Buyback Dividends Opportunistic share repurchases and OCF to offset issuances. Curren
Slide 27: Return on Invested Capital
RETURN ON INVESTED CAPITAL 40% 34.6% 35% 31.9% 30% 25% 22.2% 20.9% Percent 20% 19.4% 15% Hurdle Rate = 15% 10% WACC = 10% 5% 0% 2020 2021 2022 2023 Q3 2024 TTM Long-Term Goal: Earn an incremental return on new investment greater than our hurdle rate Non-GAAP Financial Information: Please visit ufpin
Slide 28: Recent Acquisitions
28 RECENT ACQUISITIONS Process Purpose Goal Identify attractive growth runways in Find new products and services to Achieve scale and synergy targets to each Business Unit under each Business speed our transformation from optimize growth, margins and returns. Segment and identify gaps in our commodi
Slide 29: Capital Structure
CAPITAL STRUCTURE Net Debt to Total Capitalization Net Debt to Adjusted EBITDA vs Maximum Target vs Maximum Target 45% 2.5 40% 35% 2.0 30% 1.5 Percent 25% 20% 1.0 15% 10% 0.5 2.5% 5% 0.0% 0.0% 0.0% - 0.1 - - - 0.0% 0% 0.0 2020 2021 2022 2023 Q3 2024 2020 2021 2022 2023 Q3 2024 Net Debt to Total Capi
Slide 30: Stock Performance
STOCK PERFORMANCE Long-term returns on UFPI stock are consistently above the proxy peers and major market indices Annualized Stock Return 50% 45% 43.2% 40% 36.4% 35% 33.5% 29.3% 30% 26.3% Annual % Return 25.3% 24.8% 25% 21.4% 26.4% 20% 19.3% 15.2% 14.7% 13.2% 15% 11.6% 9.7% 10.0% 8.7% 9.8% 7.5% 10%
Slide 31: Quarterly Results
QUARTERLY RESULTS (§) UFP INDUSTRIES
Slide 32: Net Sales Q3 2024
NET SALES Q3 2024 (in millions) UFP Consolidated UFP Retail Solutions $1,828 $1,902 $1,639 $1,649 $809 $1,524 $730 $629 $636 (1)% (1)% $526 (3)% (5)%* (4)%* (1)% (1)% (7)% (8)%* (9)% (3)% (5)%* (4)%* (10)% (7)% (8)%* (18)% (9)% (11)% (18… Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2023 Q4 2023 Q1 20
Slide 33: Adjusted EBITDA Q3 2024
ADJUSTED EBITDA Q3 2024 (in millions) UFP Consolidated UFP Retail Solutions $70 $208 $204 $166 $181 $165 $56 $55 $51 $35 8.8% 8.7% 11.4% 10.9% 8.0% 11.0% 7.6% 10.7% 6.6% 10.0% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 UFP Packaging UFP Construction $54 $53 $77 $
Slide 34: Thank You
THANK YOU 2801 E. Beltline Ave. NE Grand Rapids, MI 49506 (800) 598-9663 - UFPI.com 34