Jeld-wen Holding, Inc. · NYSE:JELD
Jeld-wen — Investor Day (May 2021)
66 slides from Jeld-wen's investor day presentation, May 18, 2021
Slide 1: JELD-WEN Inaugural Investor Day
JELD-WEN Inaugural Investor Day May 18, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding our business strategies and ability to execute on our plans, market potential
Slide 3: Agenda
A Compelling Investment Opportunity Gary S. Michel | President and CEO Video: JELD-WEN Excellence Model (JEM) A Sustainable Competitive Advantage - JEM Gregg Miner | SVP Global JEM Multi-faceted Growth Opportunities in North America Daniel Castillo | EVP and President, North America Video: Improving
Slide 4: A Compelling Investment Opportunity
A Compelling Investment Opportunity Gary S. Michel President and CEO 4 © 2021 JELD-WEN | Investor Day
Slide 5: A Compelling Investment Opportunity
A Compelling Investment Opportunity Proven WORLD-CLASS Multi-faceted STRATEGY FRANCHISE GROWTH and BUSINESS with BREADTH STRATEGY OPERATING and SCALE SYSTEM ≈ç 5 © 2021 JELD-WEN | Investor Day
Slide 6: Strategic Growth Drivers Delivering Results
Strategic Growth Drivers Delivering Results World-Class Financial Performance and Shareholder Returns Operational Cash Flow Accelerate Premier Performing Excellence and and Disciplined Organic Growth Culture Margin Expansion Capital Allocation MARKET LEADER | STRONG BRANDS | UNRIVALED PRODUCT BREADT
Slide 7: Values-Driven Culture Based on Our Deep Roots
Values-Driven Culture Based on Our Deep Roots… As one global team, we: BUILD businesses ethically and safely INVEST in people INSPIRE customers through innovation DELIVER on our promises IMPROVE every day …and the foundation of our future. 7 © 2021 JELD-WEN | Investor Day
Slide 8: Strong Brands with Broad Product Offering
Strong Brands with Broad Product Offering PORTFOLIO OF TRUSTED BRANDS BREADTH OF PRODUCT OFFERING Doors 65% Windows 2020 20% Revenue ~$4.2B Ancillary 15% RESIDENTIAL ANCILLARY INTERIOR DOORS PRODUCTS • Molded and flush • Shower enclosures • Wood veneer and glass • Closet systems • Stile and rail doo
Slide 9: Profile of a Global Leader
Profile of a Global Leader #1 Global leader in windows and doors operating in North America, Europe and Australasia $4.2B 80 bps 60% 2020 Net Revenue 2020 Adj. EBITDA Revenue from North Margin Expansion America Segment 4.6% 7.5% 50% 2015 - 2020 2015 - 2020 Adj. Revenue from Stable Repair Revenue CAG
Slide 10: Aspiring to be a Great Company
Aspiring to be a “Great Company” CUSTOMERS want to BUY from Where PEOPLE want to WORK SHAREHOLDERS want to INVEST in Doing the RIGHT THING for PEOPLE, our COMMUNITIES, and the WORLD 10 © 2021 JELD-WEN | Investor Day
Slide 11: Experienced Leadership Team Delivering Results
Experienced Leadership Team Delivering Results Proven Experience and G AR Y M I C H E L D AV I D G U E R N S E Y President and Chief Executive Vice President Thought Leaders in: Executive Officer and President, Europe JOHN LINKER M AR K D I X O N Executive Vice President and Chief Financial Officer
Slide 12: JEM Enables Growth and Margin Expansion
JEM Enables Growth and Margin Expansion E VO LU T I O N O F L E A N C U LT U R E Strategy and Leadership and LEADING Growth Focus Growth Excellence Commercial and LIVING System Focus Operational Excellence Continuous Improvement DOING Tool Focus Culture JEM Delivers Multiple Growth Levers 12 © 2021
Slide 13: Universal (U) Strategy for Growth
Universal (“U”) Strategy for Growth PREMIUM MATERIALS FOR HIGH-PERFORMANCE CONSTRUCTION CUSTOMER EXTERIOR & INTERIOR INDUSTRY EXPERIENCE BUILDING PRODUCTS PRODUCTIVITY INNOVATION AND SUSTAINABILITY Universally applied strategy – across all customer segments, all regions, all offerings, and all brand
Slide 14: Reliably Boring, Relentlessly Repeatable
Reliably Boring, Relentlessly Repeatable R E L I A B LY B O R I N G “ T H E H OW ” • Say-do culture • Field the best team • JEM • ESG R E L E N T L E S S LY R E P E ATA B L E “ T H E W H AT ” • Differentiated, superior customer experience • Deliver results • Drive growth 14 © 2021 JELD-WEN | Investo
Slide 15: High Visibility to Achieving 2025 Targets
High Visibility to Achieving 2025 Targets ORGANIC REVENUE 2025 ADJUSTED FREE CASH FLOW CAPITAL ALLOCATION CAGR 2021-2025 EBITDA MARGIN CONVERSION 2021 -2025 2021-2025 Above market 15% to 17% 90% to 100% ~$4 billion = 6% to 8% of adjusted net income of M&A capacity(1); share repurchase as alternative
Slide 16: ESG Strategy Aligned with Core Values
ESG Strategy Aligned with Core Values • Sustainable supply chain and circular economy • Energy efficient product portfolios • Innovation and research • Diversity, equity and inclusion • Health and safety • Transparency and governance Building on our legacy and delivering value for all stakeholders 1
Slide 17: A Sustainable Competitive Advantage
THE JELD-WEN EXCELLENCE MODEL A Sustainable Competitive Advantage Gregg Miner Senior Vice President, Global JEM Leader 17 © 2021 JELD-WEN | Investor Day
Slide 18: Creating a Sustainable Competitive Advantage
Creating a Sustainable Competitive Advantage JELD-WEN Excellence Model (JEM) Transformation SUSTAIN ABL E COM PET IT IVE ADVANTAGE Model Blueprint LEADERSHIP AND GROWTH OPERATIONAL EXCELLENCE EXCELLENCE Strat JEM DP Six Sigma/Variation Reduction Integrated Business Planning Goal Deployment Talent De
Slide 19: Creating a Premier Performance Culture
Creating a Premier Performance Culture RESULTS -DRIVEN BEHAVIOR TO BEHAVIOR -DRIVEN RESULTS Actions Habits Values Beliefs Doing JEM Living JEM Leading JEM • 80 JEM resources across the • End to end value stream mapping • Sustained differentiated globe • 14 model plants globally performance in: • Hun
Slide 20: JEM – Focus On Value To Deliver Growth
JEM – Focus On Value To Deliver Growth V Value Value Stream Velocity 3 Focus on adding value to the customer – while accelerating growth, margin and cash Order Quote to to Ship Cash Waste Reduction Accelerates Customer Value Delivery 20 © 2021 JELD-WEN | Investor Day
Slide 21: JEM – Building a Model for Long-Term Success
JEM – Building a Model for Long-Term Success 14 Model Sites Projects Across 3 Regions Full Value Stream Just Do Its Analysis 50% Lead Time Reduction Detailed Plans in the Model Sites 2x Productivity 20% Each site has customer- Creates a body of work to centric value streams focus achieve future stat
Slide 22: Velocity Driven Growth
Velocity Driven Growth Improved Special Order Lead Time in North American Door Facility 1 2 3 4 5 6 7 8 9 10 11 12 13 WEEKS Lead Time Days Units/Day Focus on 96% Lead Time 3x Higher Velocity Reduction Throughput Increasing capacity with minimal capital investment 22 © 2021 JELD-WEN | Investor Day
Slide 23: JEM Beyond the Factory Floor
JEM Beyond the Factory Floor Accounting Hiring and New Employee and Finance: Recruiting: Technology: • Closing Process • Process implemented in North • 50% reduction in approvals America – Expanding to • 20% reduction in touch • 33% reduction in cycle time Europe and Australasia time (productivity)
Slide 24: Footprint Rationalization and Modernization
Footprint Rationalization and Modernization $100M Savings Target From Footprint Rationalization Revenue Per Square Foot $170 In Progress Planning $159 Complete 2019 2021 (F) Footprint rationalization and modernization program driving cost savings, improved cycle time, enhanced quality, and improved
Slide 25: Multi-faceted Growth Opportunities in North America
Multi-faceted Growth Opportunities in North America Daniel Castillo Executive Vice President and President, North America 25 © 2021 JELD-WEN | Investor Day
Slide 26: Windows and Doors Leader in North America
Windows and Doors Leader in North America Overview • $2.5B consolidated doors and windows provider in North America • Strong brand and industry leading market positions in key products • Multi-faceted growth opportunities 2020 REVENUE End Market Channel Product Doors Residential New Construction Dis
Slide 27: Lead Time Reduction Supports Growth
Lead Time Reduction Supports Growth Vinyl Windows Entry Doors LEAD TIME ORDERS LEAD TIME ORDERS Competition JELD-WEN Prior Current Competition JELD-WEN Prior Current • Best in class talent utilizes JEM to create a winning culture • Lead time reduction fuels double digit growth rates • Productivity i
Slide 28: Increased Velocity Drives Growth
Increased Velocity Drives Growth Executing interior molded door cycle time reduction increases production and supports increased demand to deliver revenue growth… “ “Appreciate our strategic business • ELIMINATING waste through advanced problem-solving partners taking care of us during so • DRIVES p
Slide 29: Capacity Expansion Enables Growth
Capacity Expansion Enables Growth Multi-Family Windows Single Family Windows • Productivity and Capital investments • Expanding window capacity through increase unit capacity ~50% by 2023 automation • Geographic expansion into new markets • Rebalancing capacity to high growth markets • Expanded serv
Slide 30: Interior Doors Competitive Advantage in Value Stream
Interior Doors Competitive Advantage in Value Stream • INTEGRATED value stream analysis from raw material to finished product • STANDARDIZED product offering to simplify ordering and fulfillment, reducing SKU’s from the hundreds to the 20’s • SOLVED key customer challenge, increasing penetration wit
Slide 31: Innovation Fuels Growth
Innovation Fuels Growth Process Product Customer Experience Innovation Innovation Innovation • Hands-Free Assembly • Contemporary high-end • Expanding digital using Robotics sliding door solutions transaction experience • Automated Guided Vehicle • Entry door systems with • Field deployment of real
Slide 32: Q&A Session
Q&A Session
Slide 33: JELD-WEN Accelerated Growth (JAG)
JELD-WEN Accelerated Growth (JAG) Shawn Laskoski Senior Vice President, Corporate Strategy and Business Development 33 © 2021 JELD-WEN | Investor Day
Slide 34: JEM is also for Growth
JEM is also for Growth JELD-WEN Excellence Model (JEM) JELD-WEN Accelerated Growth (JAG) SUSTAIN ABL E COM PET IT IVE ADVANTAGE LEADERSHIP AND GROWTH OPERATIONAL EXCELLENCE EXCELLENCE Six Sigma/Variation Integrated Business Talent Dev. and Goal Deployment Reduction Planning Acquisition Supply Chain/
Slide 35: Universal (U) Strategy for Growth
Universal (“U”) Strategy for Growth PREMIUM MATERIALS FOR HIGH-PERFORMANCE CONSTRUCTION CUSTOMER EXTERIOR & INTERIOR INDUSTRY EXPERIENCE BUILDING PRODUCTS PRODUCTIVITY INNOVATION AND SUSTAINABILITY Universally applied strategy – across all customer segments, all regions, all offerings, and all brand
Slide 36: Differentiated Customer Experience
ACCELERATED GROWTH VIA: Differentiated Customer Experience Customer Experience Actions Across Full End-to-End Customer Journey Architects / Create differentiated Designers Channel Partner position by delivering best Builder Homeowner CX at all touchpoints, enabled by digital Builder and Consumer Bra
Slide 37: Increasing Construction Productivity
ACCELERATED GROWTH VIA: Increasing Construction Productivity Construction Productivity Better Products, New Opportunities Aid construction industry with productivity challenges and Labor Shortages drive adoption of new methods that address labor challenges Global Supply Chain Turnkey Solutions Const
Slide 38: Market Driven Offerings
ACCELERATED GROWTH VIA: Market Driven Offerings Offering Focus Current Synergies, Future Opportunities Premium Materials for * High-performance Exterior and Interior Building Products Entry and Patio Doors * Windows Interior Doors Adjacent Opportunities * Source: JELD-WEN - US Home Builder Survey Ma
Slide 39: Sustainable Innovation
ACCELERATED GROWTH VIA: Sustainable Innovation Innovation Priorities ESG Alignment Innovation Focus Areas Sustainability Focus Areas Connected Offerings (IoT) Energy Efficiency Integrated Product Systems Circular Products Construction and Sustainable Processes Installation Methods Material Science W
Slide 40: Multi-faceted Growth Opportunities in Europe
Multi-faceted Growth Opportunities in Europe David Guernsey Executive Vice President and President, Europe 40 © 2021 JELD-WEN | Investor Day
Slide 41: Positioned to Grow
Positioned to Grow JELD-WEN is the door leader in Europe #1 in doors in Europe €13B Market Operating from 17 countries 32 Production facilities Serving 300M people • Broad portfolio • Well established brands • Strong customer relationships 12 Brands • • Residential and Commercial #1 or #2 in present
Slide 42: Leadership and Significant Growth Potential
Leadership and Significant Growth Potential Segment Potential Solve Product Gaps in Current Footprint Share Acquisition • High Performance Products to UK Leverage Brand and Incumbency and France • Service Advantage • Exterior door opportunities in Germany • e-Commerce and UK • Product Innovation • S
Slide 43: Creating Value for our Customers
Creating Value for our Customers Superior customer experience driving above market growth Customer preferred configuration, quotation, Creates value and efficiency for customers with a unique order entry and order management tool approach to lead times for make-to-order product • Customer managed co
Slide 44: Expanding Service Superiority with e-Commerce
Expanding Service Superiority with e-Commerce Rapid-development techniques delivered B2B e-Commerce platforms to France and the UK in <90 Days Establishing platform leverageable globally Order cycle time reduced from up to 24 hours to 30 minutes e-Commerce orders average 40% larger than traditional
Slide 45: Leading Through Innovation
Leading Through Innovation Eco-Options • New product innovations drive about 30% of our growth • Securing and increasing our market leading position • Addressing developing customer preferences • Sustainability The Smart Door • Connected Home / IOT Continued leadership through innovation 45 © 2021 J
Slide 46: Our JELD-WEN Home: Our ESG Ambition
Our JELD-WEN Home: Our ESG Ambition Roya Behnia Executive Vice President, General Counsel and Chief Compliance Officer 46 © 2021 JELD-WEN | Investor Day
Slide 47: Our JELD-WEN Home: Our ESG Ambition
Our JELD-WEN Home: Our ESG Ambition Through our products, processes, and partnerships we care for people and the planet we call home MATERIALS THAT MATTER DOORS THAT OPEN WINDOWS THAT BRIGHTEN Energy Efficient Transparency, Reporting Innovation and Research Product Portfolio and Accountability Susta
Slide 48: Materials That Matter: Highlights
Materials That Matter: Highlights Energy Efficient Product Portfolio • ENERGY STAR Partner since 1998 • Targeting ENERGY STAR certification for all new products developed in North America • Two product lines certified by the Passive House Institute for energy efficiency • Doors made of 100% sustaina
Slide 49: Materials That Matter: Cirebon, Indonesia
Materials That Matter: Cirebon, Indonesia 49 © 2021 JELD-WEN | Investor Day
Slide 50: Doors That Open: Highlights
Doors That Open: Highlights Innovation and Research • Hired a global lead for innovation; established global innovation teams enabled by idea management systems • Revamping our portfolio management process to increase focus on transformational and cutting-edge ideas • Expanding our capabilities and
Slide 51: Windows That Brighten: Highlights
WINDOWS THAT BRIGHTEN: HIGHLIGHTS Windows That Brighten: Highlights Health and Safety • Implementing best-in-class health and safety management systems, standards and training requirements to prevent workplace injuries, fatalities and illness • 74 full-time employees focused on health and safety and
Slide 52: Windows That Brighten: Highlights
Windows That Brighten: Highlights Increasing visibility and transparency • We are building integrated sustainability reporting systems • Our executive compensation is linked to ESG metrics on safety, employee engagement and diversity 21,000+ 19 85% associate engagement languages response surveys sen
Slide 53: Our Path Forward
Our Path Forward 53 © 2021 JELD-WEN | Investor Day
Slide 54: Delivering Exceptional Shareholder Returns
Delivering Exceptional Shareholder Returns John Linker Executive Vice President and CFO 54 © 2021 JELD-WEN | Investor Day
Slide 55: Extraordinary Track Record of Performance
Extraordinary Track Record of Performance USD in millions Net Revenue Adjusted EBITDA Free Cash Flow $4,236 $446 $259 $3,381 $311 $95 2015 2020 2015 2020 2015 2020 Demonstrated revenue and earnings growth with compounding cash flow 55 © 2021 JELD-WEN | Investor Day
Slide 56: Multi-faceted Framework for Growth and Cash
Multi-faceted Framework for Growth and Cash TARGET DEMONSTRATED TRACK RECORD Volume Deliver above market growth Volume growth accelerating Price realization exceeds Pricing 10 consecutive quarters of favorable price/cost material and freight inflation Annual reduction in COGS Productivity ~$50M of s
Slide 57: Highly Variable Cost Structure Enabled by JEM
Highly Variable Cost Structure Adjusted EBITDA Per Employee Enabled by JEM 2020 Cost of Goods Sold 2015 2020 Fixed Overhead Variable Direct Labor % of Cost of Goods Sold Overhead Material Freight Labor Variable costs 2015 2020 Near-term fixed costs Highly variable cost structure provides platform fo
Slide 58: Attractive Cash Conversion Dynamics
Attractive Cash Conversion Dynamics Net Working Capital % D&A as % of Capital Effective Cash Tax Rate of Sales (1) Expenditures 160 bps Capital reduction expenditures Favorable tax enabled by at or below attributes JEM D&A 11.6% 138.9% 35.1% 105.4% 98.4% 22.2% 10.5% 17.5% 10.0% 2018 2019 2020 2018 2
Slide 59: Balanced and Disciplined Capital Deployment
Balanced and Disciplined Capital Deployment Cash Deployed 2017 – 2020 (~$940M) Return on Invested Capital Debt Reduction Share Repurchases Capital 11%-12% Expenditures 9.9% 8.8% M&A 2019 2020 2021F Disciplined approach to capital allocation driving enhanced ROIC Return on invested capital = [(Adjust
Slide 60: High Visibility to Achieving 2025 Targets
High Visibility to Achieving 2025 Targets ORGANIC REVENUE 2025 ADJUSTED FREE CASH FLOW CAPITAL ALLOCATION CAGR 2021-2025 EBITDA MARGIN CONVERSION 2021 -2025 2021-2025 Above market 15% to 17% 90% to 100% ~$4 billion = 6% to 8% of adjusted net income of M&A capacity(1); share repurchase as alternative
Slide 61: 2025 Plan - Adjusted EBITDA Margin
2025 Plan - Adjusted EBITDA Margin 15% to 17% 11.2% Well-positioned to deliver achievable long-term margin target 61 © 2021 JELD-WEN | Investor Day
Slide 62: Q&A Session
Q&A Session
Slide 63: Appendix
Appendix
Slide 64: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Management uses certain non-GAAP financial measures and considers them to be important supplemental measures of the company's performance. In addition, management believes these non-GAAP financial measures provide additional insight for analysts and inve
Slide 65: Non-GAAP Reconciliation
Non-GAAP Reconciliation USD in millions Year Ended December 31, 2015 2016 2017 2018 2019 2020 Net income $ 90.9 $ 376.1 $ 8.1 $ 141.9 $ 63.0 $ 91.6 Adjustments: Loss from discontinued operations, net of tax 2.9 3.3 — — — — Equity earnings of non-consolidated entities (2.4) (3.8) (3.6) (0.7) — — Inco
Slide 66: Australasia
Australasia Overview • ~$520 million provider of windows, doors, and ancillary products, primarily for the residential new construction and repair and remodel markets • Broad portfolio of well-established brands, with #1 share position in both windows and doors 2020 REVENUE End Market Channel Produc