Mixed materials structural crate UFP Packaging
S
INVESTOR RELATIONS PRESENTATION
Results through March 30, 2024
Deckorators Surestone composite decking, ProWood Fencing UFP Retail Solutions
Commercial wood truss UFP Construction
UFP INDUSTRIES, INC.
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 about the markets we serve, the economy, and the company itself. Words like "anticipates," "believes," "confident," "estimates," "expects," "forecasts," likely," "plans," "projects," "should," variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. The Company does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: Fluctuations in the price of lumber; adverse or unusual weather conditions; adverse conditions in the markets we serve; government regulations, particularly involving environmental and safety regulations; and our ability to make successful business acquisitions. Certain of these risk factors as well as other risk factors and additional information are included in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.
Non-GAAP Financial Information: This presentation includes certain financial information not prepared in accordance with U.S. GAAP. Because not all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly titled measures used by other companies. Management uses Adjusted EBITDA and return on invested capital, non-GAAP financial measures, in order to evaluate historical and ongoing operations. Management believes that these non-GAAP financial measures are useful in order to enable investors to perform meaningful comparisons of historical and current performance. These non-GAAP financial measures are intended to supplement and should be read together with the financial results. These non-GAAP financial measures should not be considered an alternative or substitute for, and should not be considered superior to, the reported financial results. Accordingly, users of this financial information should not place undue reliance on the non-GAAP financial measures.
This presentation is the property of UFP Industries, Inc. Any redistribution, retransmission, or reprinting of this presentation in any form without the express written
consent of UFP Industries is strictly prohibited.
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The operating segments of UFP Industries - UFP Packaging, UFP Construction and
UFP Retail Solutions - manufacture and sell a wide variety of value-added products used in residential and commercial construction, outdoor living, packaging and other industrial applications worldwide.
NO MISSION STATEMENT. JUST PEOPLE ON A MISSION.
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UFP AT A GLANCE
1955 | 15,800+ | 219 | $7.0B | $788.7M |
Founded in Grand | Employees | Facilities | Q1 2024 TTM Net | Q1 2024 TTM |
Rapids, MI | worldwide | worldwide | Sales | Adjusted EBITDA |
Business segments and markets
Based on Q1 2024 | ||
TTM Net Sales | ||
$2.8B | $1.8B | |
Big box, independents, & buying co-ops | Industrial manufacturers, OEM's, | |
40% | agricultural and logistics | |
25%
$2.2B | 31% | 4% | $0.2B |
Single-,multi-family and factory-built | Overseas trading, manufacturing and | ||
housing, commercial, concrete formers | design assets offering packaging solutions | ||
in nine countries |
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WHERE WE ARE
1
1
196
1 | 1 |
4
1 9
219 | 5 |
Locations |
9
Countries
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BUSINESS MODEL PROVIDES
SUSTAINABLE COMPETITIVE ADVANTAGES
Scale through Diversification
As North America's largest buyer of softwood lumber, UFP owns scale advantage in sourcing and in serving the three largest softwood end markets - residential
construction, retail
building products and industrial packaging.
Incentives Aligned With Shareholders
Each of our 219 operations is a profit center, managed by people who are required to own stock, and are compensated on a combination of pre-bonus operating profit and return on investment.
Commitment To
Innovation
While in its early stages, a
strategic and growing
focus on innovation has brought the company and its customers a steady stream of new products and services.
Culture
Teamwork, accountability, devotion to the customer and internal competition create a results-driven culture that drives personal and profession growth throughout the organization.
Structure
In 2020 the company
created a new operating
structure based on
management of market segments rather than geography, bringing greater focus.
RESULT:
- Hedge against cyclicality and customer concentration
- Advantages in procurement and product mix diversification
- Risk mitigation, including against lumber market volatility.
RESULT:
- Efficient capital allocation
- High ROIC
- Insiders and employees own more than 11% of shares outstanding*
RESULT:
- Robust pipeline of new products, averaging 10% of sales since 2019
- New customers and markets
- Higher EBITDA margins
RESULT:
- 68 straight years of profitability
- Average tenure of 22.3 years for our 65 most senior executives.
RESULT:
Improved performance from
- Greater alignment with customers
- Quicker introduction of new, value-added products
- Better, more rapid decision making
*Form 5 reports and employee compensation plan | 6 |
SHORT-TERM FORWARD OUTLOOK
RETAIL
Market demand down mid-single digits based on forecasts of
- Same-storesales growth of Big Box
- Home remodeling activity
CONSTRUCTION
Market demand slightly up to slightly down based on independent forecasts of
- Housing starts
- Manufactured housing shipments.
PACKAGING
Industrial production down mid-single digits based on
- Purchasing Managers Index (PMI)
- Durable goods manufacturing
- U.S. real GDP
CAPITAL ALLOCATION
- A quarterly cash dividend of $0.33 per share.
- On July 26, 2023, our board authorized the repurchase of up to $200 million worth of shares of outstanding stock through July 31, 2024.
- Capital expenditures of $250-$300 million.
- We continue to pursue strategic acquisition opportunities.
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LONG-TERM FINANCIAL GOALS
Annual unit sales | Achieving and | Earn an incremental | ||||
return on new | Maintain a | |||||
growth of 7-10% | sustaining a 12.5% | |||||
investment | conservative capital | |||||
including small | adjusted | |||||
greater than our | structure | |||||
acquisitions | EBITDA margin | |||||
hurdle rate | ||||||
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VALUE ADDED SALES
Value-added as a percent of sales
Commodity Value-added
64% | 68% | 69% | ||
60% | 63% | |||
36% | 40% | 37% | ||
32% | ||||
31% | ||||
2020 | 2021 | 2022 | 2023 | Q1 2024 TTM |
Improved mix raises EBITDA margins and contributes to long-term financial goals.
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NEW PRODUCTS
Long-term Goal: 10% of Net Sales
New Products Definition Changed in 2024
% of Net Sales*
% of Net Sales
Sunset Sales**
10.5%
3.3% | ||
3.9% | ||
9.7% | 9.9% | |
1.9% | ||
7.9% | 7.1% | |
2020
2021
2022
2023
Q1 2024 TTM
*In 2020 thru 2023 new products were defined as those that were in the front half of their life cycle, over $1M in sales and growing, and met a 15% margin threshold. In 2024 the company raised the margin threshold to 20%, while maintaining the $1M sales and growing requirement, and limiting the new product designation to a 4-year cycle - launch year plus 3 full fiscal years.
**New product sales that were excluded because they no longer meet our definition of new products.
New products and processes raise EBITDA margins and contribute to long-term financial goals.
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UFP Industries Inc. published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 20:19:14 UTC.