Jeld-wen Holding, Inc. · NYSE:JELD
Jeld-wen — Q4 2023 Earnings Presentation
35 slides from Jeld-wen's earnings presentation, Feb 20, 2024
Slide 1: Fourth Quarter 2023 Results
Fourth Quarter 2023 Results February 19, 2024
Slide 2: Speakers
Speakers Bill Christensen CEO Julie Albrecht CFO
Slide 3: Disclosures
Disclosures Certain statements in this presentation, including our guidance and business strategies, are forward- looking statements that involve risk, uncertainty and assumptions, and are based on information as of February 19, 2024. Actual results may differ materially from those set forth in such
Slide 4: Fourth Quarter 2023 Highlights
Fourth Quarter 2023 Highlights Fourth Quarter 2023 ▪ Sales of $1,021 million ▪ Adjusted EBITDA of $87 million – 8.5% of Sales; +190 bps vs Q4 2022 ▪ Generated strong cash flows ▪ Delivered 2023 cost savings goals DISCIPLINED EXECUTION DRIVING SOLID RESULTS 4
Slide 5: Full Year 2023 Scorecard
Full Year 2023 Scorecard Streamlined ▪ Initiated transformation journey Business ▪ Sold Australasia business in July 2023 Strengthened ▪ Repaid $450M in Long-term Debt Balance Sheet ▪ Significant Working Capital Reduction ▪ Net Leverage of 2.5x at year-end 2023 Reduced Cost ▪ 5 sites closures comple
Slide 6: Q4 2023 Foundational Actions
Q4 2023 Foundational Actions People Performance Culture & Capabilities Growth and Cost Reduction ▪ Launched change agent network ▪ Developed profitability improvement roadmap ▪ Strengthened the senior leadership team ▪ Closed or announced closure of 4 facilities ➢ ~$13M annual EBITDA savings ONGOING
Slide 7: New Executive Talent
New Executive Talent Gustavo Vianna Dan Valenti Matt Meier EVP & President, JELD-WEN Europe EVP, North America Doors & Distribution EVP, Chief Digital & Information Officer • 30+ years of experience including • 20+ years of general management • 25+ years leading digital technology operational and co
Slide 8: Q4 2023 Financial Results
Q4 2023 Financial Results
Slide 9: Q4 2023 Financial Summary
Q4 2023 Financial Summary USD in Millions Net Revenue Adjusted EBITDA Adjusted EBITDA Margin -13% +11% +190 bps $87 8.5% $1,179 6.6% $78 $1,021 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Core Revenue down (15%) driven by Solid productivity and price / cost results lower volume / mix partially o
Slide 10: Full Year 2023 Financial Summary
Full Year 2023 Financial Summary USD in Millions Net Revenue Adjusted EBITDA Adjusted EBITDA Margin -5% +9% +110 bps $380 8.8% $4,544 $4,304 $349 7.7% 2022 2023 2022 2023 2022 2023 Core Revenue down 5% Cost reductions and positive price / cost Lower volume / mix with partially offset by lower volume
Slide 11: Full Year 2023 Cash Flow and Year-end Leverage
Full Year 2023 Cash Flow and Year-end Leverage $345 Million 2.5x Operating Cash Flow Net Debt to EBITDA $315 million year-over-year Debt repayment funded by improvement in operating cash flow Australasia sale proceeds Strong operational performance and Leverage within new target range working capita
Slide 12: Q4 2023 Revenue Bridge
Q4 2023 Revenue Bridge USD in Millions $12 $1,179 +1% (16%) $14 $1,021 +1% ($184) Core Revenue (15%) Q4 2022 Price Volume / Mix Foreign Exchange Q4 2023 LOWER VOLUME / MIX REFLECTS MARKET HEADWINDS 12
Slide 13: Q4 2023 Adjusted EBITDA Bridge
Q4 2023 Adjusted EBITDA Bridge USD in Millions $14 $24 $87 $78 $26 Includes ~$12M SG&A cost savings ($55) Adj. Margin Adj. Margin 6.6% 8.5% Q4 2022 Price / Cost Volume / Mix Productivity SG&A / Other Income Q4 2023 STRONG PRODUCTIVITY DRIVES EBITDA IMPROVEMENT 13
Slide 14: Q4 2023 Segment Results
Q4 2023 Segment Results USD in Millions Q4 2022 Q3 2023 Segment Highlights North America Q4 2023 (Prior Year) (Previous Quarter) Net Revenue $748 $863 $790 ▪ North American margins Adjusted EBITDA $94 $87 $100 improved 250 basis points YOY Adjusted EBITDA margin 12.6% 10.1% 12.6% ▪ Lower volume / mi
Slide 15: Market Outlook
Market Outlook North America Europe Low Single-Digit High Single-Digit Volume Decline Volume Decline New single family home Residential construction high construction flat to up slightly single-digit decline R&R down low to mid-single digits Commercial projects slowing by mid-single digits 15
Slide 16: JELD-WEN's Transformation Journey
JELD-WEN’s Transformation Journey
Slide 17: Two-Pronged Approach
Two-Pronged Approach Short Term Long Term Strengthen Profitable Foundation Growth PEOPLE, PERFORMANCE & STRATEGY 17
Slide 18: Key Levers
Key Levers People Performance Culture & Growth Cost Capabilities ▪ Safety-first mindset ▪ Increase salesforce ▪ Invest in process ▪ Improve organizational efficiency automation health ▪ Upgrade go-to-market ▪ Consolidate footprint ▪ Align accountability process ▪ Utilize scale and and incentives ▪ O
Slide 19: People: Improving Organizational Health
People: Improving Organizational Health Rewards and Communication Training Recognition Activation of ~300 Investing in capabilities to deliver Extending connection between change agents on our transformation journey performance and rewards CULTURE AND CAPABILITIES PROJECT 19
Slide 20: Performance: Europe CPQ
Performance: Europe CPQ CPQ (Configure, Price and Quote) System 5-year Expected Cumulative Financial Impact ✓ Streamlines customer interactions >$15 Million ✓ Simplifies integration with other internal EBITDA Benefit systems and processes <$2.5 Million Expense / Capital Investment >50% IRR GROWTH PR
Slide 21: Performance: North America Door Automation
Performance: North America Door Automation Network Optimization Through Automation 5-year Expected Cumulative Financial Impact ✓ Expanding proven technology to improve efficiency >$22 Million EBITDA Benefit ✓ Move from batch processing to single piece flow ~$15 Million Expense / Capital Investment ✓
Slide 22: 2024 Guidance
2024 Guidance
Slide 23: 2024 Guidance
2024 Guidance 2024 2024 Adjusted EBITDA Net Revenue $370M to $4.0B to $4.3B $420M Core Revenue: Flat to down Ongoing productivity (7%) driven by uncertain improvements leading to demand environment margin expansion MARGIN GROWTH DESPITE POTENTIAL VOLUME HEADWINDS 23
Slide 24: 2024 Cash Flow Outlook
2024 Cash Flow Outlook 2024 Cap Ex 2024 ~$250M $150M to $200M $50M to $100M Operating Cash Flow ~4% of Revenue Free Cash Flow Includes ~$100 million of non-recurring transformation journey cash expenses INVESTING IN JELD-WEN'S FUTURE 24
Slide 25: JELD-WEN Going Forward
JELD-WEN Going Forward Resetting the Bar Address Reposition Improve Capital Priorities Transparency Allocation UNLOCKING SIGNIFICANT SHAREHOLDER VALUE 25
Slide 26: Appendix
Appendix
Slide 27: Key Assumptions for 2024
Key Assumptions for 2024 USD in Millions Key Assumption 2024 Estimate Depreciation and Amortization ~$130 Interest Expense $75 to $80 Tax Rate (Adjusted Earnings) ~27% Diluted Share Count ~86 million ✓ Full-year EBITDA split ~40% to 45% in 1H ✓ Price / Cost neutral versus 2023 ✓ Foreign exchange tra
Slide 28: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow USD in Millions Cash Flow 2023 2022 Net cash provided by operating activities $345 $30 Capital Expenditures(1) ($111) ($92) Free Cash Flow(2) $234 ($62) Balance Sheet(3) December 31, 2023 December 31, 2022 Total Debt $1,226 $1,747 Cash $288 $165 Net Debt(4) $938 $1,582 Di
Slide 29: Net Revenue Walk
Net Revenue Walk Q4 2023 JELD-WEN North America Europe Price 1% 1% 2% Volume / Mix (16%) (14%) (20%) Core Revenue Growth (15%) (13%) (18%) FX 1% ‒ 4% Total (13.4%) (13.3%) (13.5%) Full Year 2023 JELD-WEN North America Europe Price 5% 4% 7% Volume / Mix (10%) (8%) (15%) Core Revenue Growth (5%) (4%)
Slide 30: Full Year 2023 Revenue Bridge
Full Year 2023 Revenue Bridge USD in Millions $228 +5% $4,544 (10%) $4,304 ($465) ($3) Core Revenue (5%) 2022 Price Volume / Mix Foreign Exchange 2023 LOWER VOLUME / MIX PARTIALLY OFFSET BY HIGHER PRICING 30
Slide 31: Full Year 2023 Adjusted EBITDA Bridge
Full Year 2023 Adjusted EBITDA Bridge USD in Millions Includes ~$40M SG&A cost savings Adj. Margin Adj. Margin 7.7% 8.8% SOLID PRICE / COST RESULTS & PRODUCTIVITY BENEFITS 31
Slide 32: Adjusted EBITDA From Continuing Operations Reconciliation
Adjusted EBITDA From Continuing Operations Reconciliation USD in Millions Three Months Ended Year Ended December 31, December 31, December 31, December 31, 2023 2022 2023 2022 (Loss) income from continuing operations, net of tax $ (22.6) $ 25.9 $ 25.2 $ 12.2 Income tax expense (benefit)(1) 31.7 (2.9
Slide 33: Q4 2023 Segment Adjusted EBITDA Reconciliation
Q4 2023 Segment Adjusted EBITDA Reconciliation Three Months Ended December 31, 2023 Total Corporate and Total (Amounts in millions) North America Europe Operating Unallocated Consolidated Segments Costs Income (loss) from continuing operations, net of tax $49.0 ($32.0) $17.0 ($39.7) ($22.6) Income t
Slide 34: Q3 2023 Segment Adjusted EBITDA Reconciliation
Q3 2023 Segment Adjusted EBITDA Reconciliation Three Months Ended September 30, 2023 Total Corporate and Total (Amounts in millions) North America Europe Operating Unallocated Consolidated Segments Costs Income (loss) from continuing operations, net of tax $40.5 $10.7 $51.1 ($34.2) $16.9 Income tax
Slide 35: Q4 2022 Segment Adjusted EBITDA Reconciliation
Q4 2022 Segment Adjusted EBITDA Reconciliation Three Months Ended December 31, 2022 Total Corporate and Total (Amounts in millions) North America Europe Operating Unallocated Consolidated Segments Costs Income (loss) from continuing operations, net of tax $71.7 $0.4 $72.1 ($46.2) $25.9 Income tax ex