Simpson Manufacturing Company, Inc. · NYSE:SSD
Simpson Manufacturing — Investor Presentation (November 2021)
37 slides from Simpson Manufacturing's investor presentation, Nov 10, 2021
Slide 1: Strong Foundation. Stronger Future. Investor Presentation November 2021
STRONG FOUNDATION. STRONGER FUTURE. Simpson Manufacturing Co., Inc. Investor Presentation November 2021 Exhibit 99.1
Slide 2: Forward-Looking Statements
2 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 2 IE of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally can be
Slide 3: Investment Highlights
3 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 m
Slide 4: Simpson's Brand and Culture
4 Simpson’s Brand and Culture At Simpson, we describe the unique culture of our organization as our “Secret Sauce.” To provide solutions that help people design and build safer, stronger structures. OUR MISSION OUR COMPANY VALUES 1. Relentless Customer Focus 2. Long-Range View 3. High-Quality Produc
Slide 5: 27-Year Trading History
5 $0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 27-Year Trading History 5/25/1994 Initial public offering at $11.50 (or $2.875 adjusted for two stock splits in August 2002 & November 2004). 11/8/2021 SSD closes at all-time high of $121.54 3/24/2020 COVID-19 pandemic declared 8/19/2002 2
Slide 6: Our Strong Business Model
6 • Innovation • Research & Testing • Technology • Technical & Field Support • Training • Product Availability Long-standing, successful relationships with: • Engineers • Code Officials • Builders • Contractors • Lumberyards • Home Centers • Pro Dealers Our Strong Business Model • Connector Market L
Slide 7: Our Multilayered Approach
7 Our Multilayered Approach • 584 Patents & Trademarks • 77 Patents Pending • 229 Code Reports Innovation Research & Testing Technical & Field Support Product Availability Technology • 7 Accredited Test Laboratories • Partnerships with Key Universities • 307 Engineers • 443 Field Sales Reps • Thousa
Slide 8: Core Addressable Market
8 Core Addressable Market(1) Wood Connectors & Truss Concrete Market Size $15.0 B Addressable Market $1.3 B (9%) SSD Share $185 M (14%) Market Size $5.8 B Addressable Market SSD Share $190 M (19%) Market Size/ Addressable Market $2.5 B SSD Share $891 M (36%) Fasteners $1 B (17%) (1) Note: Market sha
Slide 9: Commitment to Growth
9 Commitment to Growth OEM R&R / DIY STRUCTURAL STEEL MASS TIMBER KEY GROWTH INITIATIVES FOCUSED ON: CONCRETE LEADER IN ENGINEERED LOAD-RATED CONSTRUCTION FASTENING SOLUTIONS LEADER IN CUSTOMER-FACING TECHNOLOGY
Slide 10: OEM
10 OEM RATIONALE KEY GOAL STRATEGY • >$90 M total addressable market primarily with fastening technologies • Potential to develop other engineered solutions • 2,500 existing Simpson products applicable for OEM needs • Our solutions make the industry more efficient • Aligned with the Simpson business
Slide 11: OEM Spotlight
11 Truck Bed Screw Strong Drive® TIMBER Screw Quick Drive® OEM Spotlight Existing line of fasteners and anchors for OEM Truck bed and crating installations using Quik Drive® tool and collated fasteners SOLUTION Racking installation using Titen HD® Anchors Stainless-Steel Titen HD® Anchor
Slide 12: R&R / DIY
12 RATIONALE KEY GOAL STRATEGY • $500-$700 M total addressable market: decks, patios, porches, pergolas, gazebos, fencing and garage organization • Existing product line with potential for several extensions • Established channel/partners • Proven approach with Outdoor Accents • Aligned with the Sim
Slide 13: R&R / DIY Spotlight
13 R&R / DIY Spotlight SOLUTION Outdoor Accents® decorative hardware – two collections (architectural styles) for building outdoor structures. Mission Collection™ Avant Collection™ Outdoor Accents® hardware used to build pavilions
Slide 14: Mass Timber
14 Mass Timber RATIONALE KEY GOAL STRATEGY • $200 M total addressable market • Strong double digit growth rate in N. America • Positive environmental impact • New market; many product opportunities • Aligned with the Simpson business model Become the engineers’ partner of choice for mass timber conn
Slide 15: Mass Timber Spotlight
15 Mass Timber Spotlight New dedicated line of screws for cross laminated timber (CLT) SDS and SDWS CMSTCBH Simpson products utilized in CLT renovation project at an international airport in North America SOLUTION MDCST48 Simpson products utilized in construction of CLT commercial office building in
Slide 16: Concrete
16 Concrete RATIONALE KEY GOAL STRATEGY • $1.3 B total addressable market • Growth rate linked to infrastructure spend • Simpson is a recognized leader in concrete and cold-formed steel solutions • Many products and applications require engineering, testing and code approval • Aligned with the Simps
Slide 17: Concrete Spotlight
17 Concrete Spotlight SOLUTION Asphalt repair conducted at Company parking lot 44oz. Carbon Fabric A wide range of product solutions for concrete and masonry projects. SET-3G™ Adhesive Heli-Tie™ Helical Stitching Tie Carbon fabric used as fiber-reinforced plastic (FRB) installation on a concrete str
Slide 18: Structural Steel
18 Structural Steel RATIONALE KEY GOAL STRATEGY • > $350 M total addressable market • Structural steel construction is roughly half of the construction spend in North America • Field welder shortage: addressed by bolted structural connections • Bolted connections can improve productivity by 25% vs.
Slide 19: Structural Steel Spotlight
19 Structural Steel Spotlight Yield-Link® connection for structural steel framing Special moment frame Yield-Link® design used to build education buildings in California (left & above) and assisted living facility in Oregon (below) SOLUTION
Slide 20: Construction Fasteners
20 Be the global market leader in engineered / load-rated construction fastening solutions. Construction Fasteners 5 STRATEGY • Develop critical mass by expanding our engineered fastener business for DIY/R&R, OEM and Mass Timber markets • Provide innovative products that are preferred by both end-us
Slide 21: Customer-Facing Technology Solutions
21 Customer-Facing Technology Solutions • 3D Deck Planner • 3D Pergola Planner • Floor, roof and wall design software • Accurate take-offs • EWP design software • e-commerce • Accurate take-offs • Options management Builders Lumberyards & Distributors Repair & Remodel & DIY Component / Truss Manufac
Slide 22: Strong Business Drives Stockholder Value
22 North America $1,102 Europe $157 Asia/Pacific $9 Wood Construction $1,083 Concrete Construction $185 Strong Business Drives Stockholder Value Our 2020 Sales by Product… ($ USD Millions) and Across Operating Segments ($ USD Millions) $0.58 $1.04 $0.87 $1.05 $1.29 $1.38 $1.86 $1.94 $2.72 $2.98 $4.2
Slide 23: Historical Net Sales
23 Historical Net Sales Our investments in adjacent products and markets have helped mitigate our exposure to a cyclical U.S. housing market over time. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 $0 $100 $200 $300 $400 $500 $
Slide 24: Operating Income Margin Outperformance
24 19.9% 15.1% 13.2% 6.0% 14.1% 12.3% 9.4% 11.6% 13.3% 13.8% 16.5% 14.2% 16.0% 15.9% 19.9% 20.0% - 22.0%(2) 13.7% 5.9% (7.3%) (2.7%) 3.7% 1.1% 3.8% 5.4% 7.8% 9.9% 12.0% 12.6% 11.5% 9.5% 9.6% (15.0%) (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20
Slide 25: ROIC Within Top Quartile of Proxy Peers
25 33.8% 24.7% 20.0% 18.4% 12.2% 11.3% 10.8% 10.1% 9.8% 9.1% 8.9% 7.4% 6.5% 6.2% -23.7% -24.6% ROIC(1) Within Top Quartile of Proxy Peers(2) (1) Return on Invested Capital (ROIC) reflects latest fiscal year reported. See appendix for ROIC definition. (2) Proxy peer average includes: AAON, AMWD, APOG
Slide 26: Well-Positioned to Drive Growth
26 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 $119 $160 $206 $208 $58 $29 $38 $38 $28 $2 $3 $3 $37 $40 $40 $40 $70 $111 $61 $76 2017
Slide 27: Capital Deployment History
27 • Tuck-in acquisitions • Strategic asset purchases Acquisitions • Repurchases of common stock • Quarterly cash dividends Shareholder Returns • Organic growth through strategic capital investments in business • Core capex Capital Deployment History $428.4 Million 2019 – YTD 2021(1) Cumulative Free
Slide 28: Use of Cash Priorities
28 Use of Cash Priorities Cash Flow From Operations Share Repurchases Investing in growth initiatives (engineering, people, testing, etc.) Maintenance CapEx Potential M&A Maintain quarterly cash dividends(1) Consistently and moderately raise dividends Opportunistic share repurchases Capital return t
Slide 29: Acquisition Strategy
29 Acquisition Strategy • Strengthen our business model by expanding our product lines 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-times and bring p
Slide 30: Sustainability and Environmental and Social Responsibility
30 Sustainability and Environmental and Social Responsibility “Our people are the most vital part of our business, and providing a safe, healthy, sustainable, and rewarding working environment is of fundamental importance.” – Karen Colonias • Issued 2019 ESG report in March 2020 (Inaugural Report) •
Slide 31: 5-Year Company Ambitions
31 5-Year Company Ambitions Strengthen our values-based culture Be the partner of choice Be an innovation leader in the markets we operate Continue above market growth rate relative to U.S. housing starts Continue expanding our operating income margin to remain within the top quartile of proxy peers
Slide 32: Appendix
32 Appendix
Slide 33: A Pioneer in Construction Solutions
33 A Pioneer in Construction Solutions 1956 1970 1984 1996 1997 1999 2005 Simpson structural connectors are the industry standard. 1994 NYSE LISTING (SSD) OUR FOUNDER BARC SIMPSON EXPANSION INTO CONCRETE EXPANSION INTO FASTENERS FIRST CONNECTOR CONNECTOR MARKET LEADER EXPANSION INTO WOOD SHEAR WALLS
Slide 34: A Pioneer in Construction Solutions (Continued)
34 A Pioneer in Construction Solutions (Continued) 2011 2013 2016 20192012 2008 2009 20202017 EXPANSION INTO SS FASTENERS EXPANSION INTO ORDINARY MOMENT FRAMES FURTHER EXPANSION INTO CONCRETE REPAIR AND CFS EXPANSION INTO SPECIAL MOMENT FRAMES EXPANSION INTO FRP/CARBON FIBER SOLUTIONS AND TRUSS SOFT
Slide 35: Commitment to Innovation: State-of-the-Art Test Labs
35 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
Slide 36: Return on Invested Capital (ROIC) Definition
36 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 acc
Slide 37: Strong Foundation. Stronger Future.
STRONG FOUNDATION. STRONGER FUTURE.
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