Quanex Building Products Corporation · NYSE:NX

Quanex Building Products — Investor Presentation (January 2024)

27 slides from Quanex Building Products's investor presentation, January 2024

  1. Slide 1: Investor Presentation January 2024

    I N V E S TO R P R E S E N TAT I O N JANUARY 2024 © 2023 Quanex | Q U A N E X . C O M © 2023 Quanex | Q U A N E X . C O M

  2. Slide 2: Safe Harbor Statement

    S A F E H A R B O R S TAT E M E N T Forward Looking Statements: Statements that use the words “estimated,” “expect,” “could,” “should,” “believe,” “will,” “might,” or similar words reflecting future expectations or beliefs are forward- looking statements. The forward-looking statements include, but

  3. Slide 3: Quanex at a Glance

    Q U A N E X AT A G L A N C E C O M PA N Y O V E R V I E W FY 2023 REVENUE BREAKDOWN • Largest domestic manufacturer and supplier of components to window and cabinet OEMs – 85-year legacy of market leadership and consistent growth Repair & Remodel 35% • Diversified business operating through three se

  4. Slide 4: Robust Portfolio of Current Product Offerings

    ROBUST PORTFOLIO OF CURRENT PRODUCT OFFERINGS T O P S U P P L I E R T O O E M S A C R O S S A B R O A D R A N G E O F P R O D U C T C AT E G O R I E S 1 1 Insulating Glass Spacers 2 Window & Patio Screens 3 Door Components Door & Other Components Enhance durability, Largest selection of condensation

  5. Slide 5: Leading Components Supplier to OEMs

    L E A D I N G C O M P O N E N T S U P P L I E R TO O E M s U.K. VINYL CUSTOM SCREENS AND U.S. VINYL CABINET I G S PA C E R S EXTRUSIONS MIXING ACCESSORIES EXTRUSIONS COMPONENTS Market A global market leader Top 5 manufacturer in U.K. A market leader in the U.S. A market leader in U.S. Top 5 manufact

  6. Slide 6: Differentiated Manufacturing Footprint

    D I F F E R E N T I AT E D M A N U FA C T U R I N G F O O T P R I N T 1 2 3 4 5 Ideally positioned to Extensive coast to coast Domestic footprint supports Efficient design allowing for Differentiated just-in-time, text manufacturing capacity local customer base handle international supply flexible m

  7. Slide 7: Core Manufacturing Capabilities with Broad Applications

    COR E M AN U FAC TU RING CAPABIL ITIES WITH BROAD APPL ICATIONS D I F F E R E N T I AT E D , G L O B A L M A N U FA C T U R I N G F O O T P R I N T – P O S I T I O N E D T O E X PA N D O F F E R I N G S The continuous process in which rubber and other additive compounds are softened through a heated

  8. Slide 8: Accelerating ESG Trends Aligned with Quanex Identity

    A C C E L E R AT I N G E S G T R E N D S A L I G N E D W I T H Q U A N E X I D E N T I T Y ESG WOVEN INTO C O R P O R AT E C U LT U R E Continuous focus on driving improvement across the organization to create value for all key constituents including: Initiatives in process in each business segment

  9. Slide 9: Growth with Purpose

    GROWTH WITH PURPOSE © 2022 Quanex | Q U A N E X . C O M © 2023 Quanex | Q U A N E X . C O M

  10. Slide 10: Journey to Becoming BIGGER

    J O U R N E Y TO B E C O M I N G : B Bold acquisition I Innovative product G Growth-focused G Globally-oriented E Engaged to maximize R Responsive to ideas strategy targeting development driving strategy incorporating approach that leverages positive impact on all and opportunities existing and new

  11. Slide 11: Pathway to $2 Billion of Sales

    GROWTH WITH PURPOSE PAT H WAY T O $ 2 B I L L I O N O F S A L E S ($ in millions) $2,000 $2,000 3 2 $1,222 $1,072 1 1 2 3 4 5 Near-Term Long-Term Inorganic Long-Term FY 2022 Organic Growth Organic Growth M&A Activity Target • Price and volume growth • Continued volume and growth • Expanding target m

  12. Slide 12: Investing in the Core: Reinforcing Sector Leadership

    INVESTING IN THE CORE: REINFORCING SECTOR LEADERSHIP ▲Growth in existing markets and reinforcing leadership positions enabling improved relative positioning with material suppliers driving continued volume growth and share gains – Significant increase in scale will create a more effective platform f

  13. Slide 13: Strategy for Inorganic Growth in Target Markets

    STRATEGY FOR INORGANIC GROWTH IN TARGET MARKETS WHO WE WANT TO BE: Attractive Category With New Opportunities for Growth Broader Channel Diversification Beyond OEM Value Added Positioning In The House On The House Outside The House with Secular Growth Drivers Cabinetry IG Spacers Decking Current Est

  14. Slide 14: Financial Results

    FINANCIAL RESULTS © 2022 Quanex | Q U A N E X . C O M © 2023 Quanex | Q U A N E X . C O M

  15. Slide 15: Strong Financial Results with Clear Operating Objectives

    S T R O N G F I N A N C I A L R E S U LT S W I T H C L E A R O P E R AT I N G O B J E C T I V E S REVENUE NET INCOME & ADJ. EBITDA ($ in millions) ($ in millions) $1,222 $153 $160 $1,131 $127 $1,072 $103 $105 $88 $83 $894 $57 $852 $38 (1) FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 -$47 FY 2019 FY 2020

  16. Slide 16: Favorable Leverage Profile and Free Cash Flow Generation

    FAVO R A B L E L E V E R AG E P RO F I L E A N D F R E E C A S H F LOW G E N E R AT I O N N E T L E V E R A G E (1) • Cumulative Free Cash Flow of ~$500M since FY 2017 Significant Balance Sheet capacity providing meaningful flexibility around internal as well  Free Cash Flow weighted to second half

  17. Slide 17: Strong Execution Driving Substantial Improvement in Returns

    S T R O N G E X E C U T I O N D R I V I N G S U B S TA N T I A L I M P R O V E M E N T I N R E T U R N S R E T U R N O N I N V E S T E D C A P I TA L ( R O I C ) (1) 20.6% 20.6% 15.7% 10.4% 8.2% FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 R E T U R N O N E Q U I T Y ( R O E ) (2) 20.1% 19.8% 15.1% 11.9%

  18. Slide 18: Capital Allocation Priorities

    C A P I TA L A L L O C AT I O N P R I O R I T I E S F O C U S E D O N I N C R E A S I N G T O TA L S H A R E H O L D E R R E T U R N ORGANIC STRATEGIC STOCK DEBT DIVIDENDS GROWTH M&A BUYBACKS REPAYMENT Evaluating ~$72M Focused Targeted & Repurchased Since ~$66M Paid Out Investment of Opportunistic F

  19. Slide 19: Investment Appeals

    INVESTMENT APPEALS A G R O W I N G M A N U FA C T U R I N G B U S I N E S S W I T H C O R E C A PA B I L I T I E S & B R O A D A P P L I C AT I O N S 1 A Global market leader aligned with top OEMs across all product categories 2 Profitable above-market growth, strong free cash flow generation & sign

  20. Slide 20: Appendix

    APPENDIX © 2022 Quanex | Q U A N E X . C O M © 2023 Quanex | Q U A N E X . C O M

  21. Slide 21: GAAP/Non-GAAP Reconciliation

    G A A P/ N O N - G A A P R E C O N C I L I AT I O N ( U N A U D I T E D ) FY23, FY22, FY21, FY20 & FY19 ADJUSTED NET INCOME & ADJUSTED EBITDA Twelve Months Ended Twelve Months Ended Twelve Months Ended Twelve Months Ended Twelve Months Ended Reconciliation of Adjusted Net Income October 31, 2023 Oct

  22. Slide 22: GAAP/Non-GAAP Reconciliation: Free Cash Flow

    G A A P/ N O N - G A A P R E C O N C I L I AT I O N ( U N A U D I T E D ) FREE CASH FLOW ($ in thousands) Q1 Q2 Q3 Q4 Fiscal 2017 Cash provided by operating activities $3,081 $13,648 $29,736 $33,313 $79,778 Capital expenditures ($8,141) ($9,409) ($9,548) ($7,466) ($34,564) Free Cash Flow ($5,060) $4

  23. Slide 23: GAAP/Non-GAAP Reconciliation: Net Debt

    G A A P/ N O N - G A A P R E C O N C I L I AT I O N ( U N A U D I T E D ) NET DEBT The following table reconciles the Company's Net Debt which is defined as total debt principal of the Company plus finance lease obligations minus cash. ($ in thousands) 10.31.19 10.31.20 10.31.21 10.31.22 10.31.23 Re

  24. Slide 24: GAAP/Non-GAAP Reconciliation: Net Leverage

    G A A P/ N O N - G A A P R E C O N C I L I AT I O N ( U N A U D I T E D ) NET LEVERAGE Capitalization ($ in thousands) FY19 10.31.19 FY20 10.31.20 FY21 10.31.21 FY22 10.31.22 Q1 1.31.23 Q2 4.30.23 Q3 7.31.23 Q4 10.31.23 Cash & Cash Equivalents $30,868 $51,621 $40,061 $55,093 $43,055 $43,496 $73,252

  25. Slide 25: GAAP/Non-GAAP Reconciliation: ROIC & ROE

    G A A P/ N O N - G A A P R E C O N C I L I AT I O N ( U N A U D I T E D ) ROIC & ROE Tax Rate Assumption: 20.0% FY18 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Adj. Net Income $31.4 $40.7 $58.6 $88.9 $90.9 Adj. EBITDA $89.9 $102.7 $104.5 $126.8 $152.5 $159.6 D&A $51.8 $49.6 $47.2 $42.7 $40.1 $42.9 Adj.

  26. Slide 26: Executive Compensation Aligned with Shareholders

    E X E C U T I V E C O M P E N S AT I O N ALIGNED WITH SHAREHOLDERS Performance-based compensation philosophy at target • Base salary targeted at market 50th percentile • Annual incentive award based on specific metrics • Long-term incentives as referenced below 2024 Annual Incentive Award • 20% weig

  27. Slide 27: Investor Contact

    INVESTOR CONTACT Scott Zuehlke SVP, Chief Financial Officer & Treasurer 1800 West Loop South, Suite 1500 Houston, TX 77027 (713) 877-5327 scott.zuehlke@quanex.com © 2022 Quanex | Q U A N E X . C O M © 2023 Quanex | Q U A N E X . C O M

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