Ufp Industries, Inc. · NASDAQ:UFPI
Ufp Industries — Investor Presentation (May 2023)
35 slides from Ufp Industries's investor presentation, May 15, 2023
Slide 1: Investor Relations Presentation Results through April 1, 2023
Investor Relations Presentation Results through April 1, 2023
Slide 2: Forward-looking statements and non-GAAP information
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, and projections abou
Slide 3: UFP Industries holding company overview
UFP Industries is a holding company whose operating subsidiaries – UFP Packaging, UFP Construction and UFP Retail Solutions – manufacture, distribute and sell a wide variety of value-added products used in residential and commercial construction, outdoor living, packaging and other industrial applic
Slide 4: UFP at a Glance
15,000+ Employees worldwide 221 Facilities worldwide 1955 Founded in Grand Rapids, MI $9.6B 2022 Net Sales 39% 32% 25% 4% Based on 2022 Net Sales $3.7B in 2022 Big box, independents, & buying co-ops $2.4B in 2022 Industrial manufacturers, OEM’s, agricultural and logistics UFP AT A GLANCE $3.1B in 20
Slide 5: Where We Are
WHERE WE ARE 197 2 4 1 2 9 1 5 221 Locations 8 Countries
Slide 6: Long-Term Financial Goals
Annual unit sales growth of 5-7 percent, including small acquisitions Minimum 10% adjusted EBITDA margin Earn incremental return on new investment greater than WACC Maintain a conservative capital structure LONG-TERM FINANCIAL GOALS
Slide 7: Value Added Sales
2013 31% 69% 36% 64% 40% 60% 37% 63% 32% 68% Value-added as a percent of sales 20 22 .. VALUE ADDED SALES Commodity Value-added 2019 2020 2021 2022 Q1 2023 YTD
Slide 8: Innovation and New Products
$5m New Products $377m INNOVATION AND NEW PRODUCTS $540m 10% 10% $426m 8% $842m $736m 10% $167m 9% 2019 2020 2021 2022 Q1 2023 YTD Net Sales % of Sales 4% *This represents new product sales that were excluded because they no longer meet our definition of new products. New products are defined as tho
Slide 9: Innovation and New Products: UFP Venture Fund
INNOVATION AND NEW PRODUCTS In 2022 we launched our Innovation Accelerator to: Bring new products and services to market faster Spur internal growth in new capabilities, products and processes Drive faster scale and synergy through rapid iteration. In 2023 we started the UFP Venture Fund to: Spur ex
Slide 10: New Structure Drives Better Strategy, Development and Execution
New Structure Drives Better Strategy, Development and Execution Western Division Southern Division Northern Division • Improved alignment with our customers • Faster introduction of new, value-added products • Better, quicker decision making • More effective allocation of capital Our new structure,
Slide 11: Recent Acquisitions
Process Identify attractive growth runways in each Business Unit under each Business Segment and identify gaps in our capabilities to pursue those runways. Find new products and services to speed our transformation from commodity sales to value-added selling solutions and brands. Purpose Achieve sca
Slide 12: A Unique Culture Built for Good Times and Bad
Diversified business portfolio mitigates lumber and business risk Mix of fixed- and variable-priced products hedges volatile lumber prices Return-focused approach to capital allocation Capital reserves used opportunistically Average senior management team tenure: 22.6 years 67 straight years of prof
Slide 13: Business Segments
BUSINESS SEGMENTS @ UFP RETAIL SOLUTIONS @ UFP PACKAGING a UFP CONSTRUCTION
Slide 14: UFP Retail Solutions
$284m 19% 15% $402m $510m 19% 58% 42% 46% 43% 54% 57% 55% 45% $307m 8% 8% $283m New Products & % of Net Sales Value-added as a % of Net Sales DecKorators $326M 2022 UFP Edge $168M 2022 Prowood, Sunbelt & Outdoor Essentials $3.2B 2022 Net Sales % of Sales Commodity Value-added 2019 2020 2021 2022 201
Slide 15: UFP Retail Solutions brands and products
. Outdoor lifestyle products including wood and vinyl fencing, landscape and garden décor, picnic tables, pergolas, trellises and more Premium siding, pattern, trim; interior accent wall products Pressure-treated decking, timbers, panels and construction materials, including fire-retardant The indus
Slide 16: UFP Packaging
$69m 6% 8% $73m $177m 7% 35% 66% 34% 68% 32% 65% 72% 28% $278m $38m 12% 2% UFPpackaging.com Protective Packaging Solutions $57M 2022 PalletOne $399M 2022 Structural Packaging $1.9B 2022 2019 2020 2021 2022 2019 2020 2021 2022 New Products & % of Net Sales Value-added as a % of Net Sales Commodity Va
Slide 17: UFP Packaging solutions
Innovative packaging solutions and components backed by a global manufacturing footprint and the industry’s leading engineering, design, and integrated service teams STRUCTURAL PACKAGING Wood, steel, foam and corrugated for mixed material crates and specialty containers. Hard cases, lumber processin
Slide 18: UFP Construction
$60m 4% $54m 5% $136m 3% 24% 81% 19% 73% 27% Factory-Built 76% $1.2B 2022 Commercial $336M 2022 Concrete Forming $264M 2022 Site-Built $1.4B 2022 23% 77% $39m 5% 1% 2019 2020 2021 2022 2019 2020 2021 2022 New Products & % of Net Sales Value-added as a % of Net Sales Commodity Value-added $148m Net S
Slide 19: UFP Construction markets
Roof trusses, floor joists, laminated wall panels, cabinet components, countertops and milled components for modular and manufactured homes, RV’s and mobile offices Lumber and panels; designed, engineered and manufactured forms Roof trusses, wall panels, floor systems, doors and framing services for
Slide 20: International
Lumber trading in 65 countries. Industrial packaging solutions manufacturing in Australia, Mexico, Canada, Italy and India. 2022 Net Sales: $409 million
Slide 21: Sustainability Continuum
Drive operational excellence throughout the enterprise Cultivate a unique, rewarding culture throughout the UFP family of companies Provide significant opportunity for professional and personal growth Support communities in which we operate Supply exceptional products from sustainable sources Mainta
Slide 22: Our Sustainability Philosophy
OUR SUSTAINABILITY PHILOSOPHY Priorities are successful employee outcomes and consistent shareholder return For UFP Industries, doing right doesn’t require departments and titles, but is simply part of who we’ve been and who we continue to be. And that’s how we like it – fewer committees, higher sta
Slide 23: Financials
FINANCIALS () UFP INDUSTRIES
Slide 24: Our Performance
OUR PERFORMANCE Net Earnings (ACI) ROIC Net Debt to Adjusted EBITDA 2019 2021 2020 Unit sales growth rate $ Sales in Millions Growth rate Strong track record of growth and performance improvement with emphasis on raising gross profit dollars per unit. ROIC-focused. 2022 21% 37% 117% 29% Non-GAAP Fin
Slide 25: Managing Lumber Market Risk
MANAGING LUMBER MARKET RISK Adjusted EBITA Margin Lumber Market Volatility* 4.2% 34.5% 39.9% 39.9% 6.2% 7.2% 8.4% 9.7% 11.4% 11.1% 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% 50% 2019 2020 2021 2022 Q1 2023 YTD Lumber Market Volatility Adjusted EBITDA Margin *Standard deviation of lumber prices divide
Slide 26: Net Sales
Net Sales Percent Change Net Sales Percent Change NET SALES (in millions) $4,416 $5,154 $8,636 $9,627 6% 6% 28% 2% 5% 5% 4% (1)% -5% 5% 15% 25% 35% 45% 55% $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 2019 2020 2021 2022 UFP Consolidated $1,499 $2,167 $3,418 $3,651 10% 25% 31% 10% 0% 24% (4)% (3)%
Slide 27: Adjusted EBITDA
Adjusted EBITDA Adjusted EBITDA Margin Adjusted EBITDA Adjusted EBITDA Margin UFP Consolidated UFP Retail Solutions Adjusted EBITDA Adjusted EBITDA Margin Adjusted EBITDA Adjusted EBITDA Margin UFP Packaging UFP Construction Long-Term Goal: Achieve and sustain a 10% adjusted EBITDA margin Adjusted E
Slide 28: Adjusted EBITDA Growth and Unit Sales
UFP Consolidated UFP Retail Solutions UFP Packaging UFP Construction ADJUSTED EBITDA GROWTH AND UNIT SALES 6% 6% 28% 2% 19% 36% 94% 31% 0% 20% 40% 60% 80% 100% 2019 2020 2021 2022 4% (6)% 40% (1)% 34% (1)% 200% 25% -20% 20% 60% 100% 140% 180% 220% 2019 2020 2021 2022 10% 25% 31% 0% 18% 127% (11)% 19
Slide 29: Return on Invested Capital
RETURN ON INVESTED CAPITAL Hurdle Rate = 20% Percent 15.1% 21.0% 32.2% 34.6% 0% 5% 10% 15% 20% 25% 30% 35% 40% 2019 2020 2021 2022 WACC = 10% Long-Term Goal: Earn an incremental return on new investment over our WACC Non-GAAP Financial Information: Please visit ufpinvestor.com for reconciliation to
Slide 30: Cash Cycle
CASH CYCLE Cash Cycle = Days Receivables Outstanding + Days Supply of Inventory – Days Payables Outstanding 65* 56* 64* 64* 71 0 10 20 30 40 50 60 70 80 2019 2020 2021 2022 Q1 2023 YTD Days * Within the cash cycle, we’ve modified our calculation of days payables outstanding to be based on the cost o
Slide 31: Balanced Use of Free Cash Flow
BALANCED USE OF FREE CASH FLOW Acquisitions to contribute half of our total annual unit sales growth CapEx plan of $200M to $225M in 2023 Opportunistic share repurchases to offset issuances Increasing dividends Return-focused approach to capital allocation. $349 $336 $512 $832 $25 $31 $40 $59 $29 $9
Slide 32: Capital Structure
CAPITAL STRUCTURE Conservative capital structure ensures ample resources to pursue prudent investment opportunities. Net Debt to Total Capitalization vs Maximum Target Net Debt to Adjusted EBITDA vs Maximum Target 15.7% 0.0% 0.0% 2.5% 0.0% 0.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 2018 2019 2020 20
Slide 33: Net Sales Q1 2023
NET SALES Q1 2023 (in millions) $2,489 $2,901 $2,323 $1,914 $1,822 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 UFP Consolidated $993 $1,121 $845 $691 $750 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 UFP Retail Solutions $611 $676 $585 $522 $487 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 UFP Packaging $787 $975
Slide 34: Adjusted EBITDA Q1 2023
ADJUSTED EBITDA Q1 2023 (in millions) $292 $319 $274 $213 $202 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 UFP Consolidated $78 $31 $36 $34 $49 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 UFP Retail Solutions $92 $105 $90 $89 $67 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 UFP Packaging $85 $138 $116 $84 $62 Q1
Slide 35: Thank You
2801 E. Beltline Ave. NE Grand Rapids, MI 49506 (800) 598-9663 - UFPI.com THANK YOU