UFP Industries : IR Full Deck Q1 2025 Final for Website (1)

Published: 2025-04-30 13:37:45 ET UFPI

Published on 04/30/2025 at 13:37

INVESTOR RELATIONS PRESENTATION

Results through March 29, 2025

Deckorators Voyage Decking with Surestone Technology

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, return on invested capital, and liquidity, 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.

The operating segments of UFP Industries - UFP Packaging, UFP Construction and UFP Retail Solutions - convert 7% of North American softwood lumber, manufacturing and selling 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.

5 YEAR PERFORMANCE*

+30%

Average Annual TSR

~5%

Average Annual Unit growth

~300bps

Expansion in adjusted EBITDA Margin

2024: 10.3%

~10%

Average Annual ROIC Growth 2024: 18.3%

~24%

Average Annual Growth in EBITDA

* Five years ending 2024 4

UFP has built-in scale advantage as the largest converter of softwood lumber in North America fragmented

IMPROVEMENTS

19.5B board feet

INDUSTRIAL

11.2B

board feet

CONSTRUCTION

19.8B board feet

$2.6B

$1.6B

$2.1B

TOTAL U.S. SOFTWOOD CONSUMPTION BY END MARKETS*

UFP 2024 REVENUE BY BUSINESS SEGMENTS

*Source: Forest Economic Advisors. Improvements = Retail. Industrial = Packaging

OBJECTIVES

Market Expansion

Unit Sales Growth

Product & Process Innovation

Margin Growth

STRATEGIES

NEW CUSTOMERS

New locations of national accounts

Focus on Packaging verticals

ORGANIC

Greenfields to fill geographic holes

Leverage footprint to grow with national customers

M&A

Core tuck-ins, consolidations

Complementary value-added adjacencies to grow, and enhance EBITDA margins

Growth

PRODUCT RATIONALIZATION

Data-optimized for streamlined offerings and improved EBITDA margins and ROIC

R&D/INNOVATION

Dedicated innovation teams

Internal venture fund investments

NEW PRODUCTS

Long-term goal of 10% of net sales

Alternative materials to broaden markets/customers

Enhance EBITDA margin

Mix Improvements

ENHANCED OPERATIONS TECHNOLOGY

Technology solutions in transportation, purchasing, design and shop floor

CAPACITY CONSOLIDATION

Centers of Excellence model lowers production costs

Strategic consolidations to enhance efficiencies

AUTOMATION & ROBOTICS

Enhance productivity and efficiencies

Reduce non-value-added repetitive motion and adverse ergonomics for employees

Ops Improvements

UFP AT A GLANCE

1955

Founded in Grand Rapids, MI

15,000+

Employees worldwide

215

Facilities worldwide

$6.6B

Q1 2025 TTM

Net Sales

$643.6M

Q1 2025 TTM

Adjusted EBITDA

$2.6B

Business segments and markets

Based on Q1 2025 TTM Net Sales

$1.6B

Big box, independents, & buying co-ops

Industrial manufacturers, OEM's,

39%

25%

32%

agricultural and logistics

$2.1B

Single-, multi-family and factory-built housing, commercial, concrete formers

$0.3B

Overseas trading, manufacturing and design assets offering packaging solutions in nine countries

WHERE WE ARE

189

1 10

215

Locations

Countries

BUSINESS MODEL PROVIDES SUSTAINABLE COMPETITIVE ADVANTAGES

Scale through Diversification

Incentives Aligned With Shareholders

Commitment To Innovation

Culture

Structure

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.

Each of our 215 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.

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.

Teamwork, accountability, devotion to the customer and internal competition create a results-driven culture that drives personal and profession growth throughout the organization.

In 2020 the company created an 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

New customers and markets

Higher EBITDA margins

RESULT:

70 straight years of profitability

Average tenure of 23 years for our 69 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 and employee compensation plan reports

LONG-TERM FINANCIAL GOALS

Annual unit sales growth of 7-10% including small acquisitions; new product sales are 10% of total sales

Achieve and sustain a 12.5% adjusted EBITDA margin

Earn an incremental return on new investment

greater than our 15% hurdle rate

Maintain a conservative capital structure < 1.5X Adjusted EBITDA

VALUE-ADDED SALES

Value-added as a percent of sales

69%

70%

59%

60%

41%

40%

31%

30%

7.2%

9.7%

10.3%

9.7%

2011

2019

2021

PalletOne and Spartanburg Forest Products acquisitions

2024

Q1 2025 TTM

Commodity Value-added EBITDA Margin

2013

ALTERNATIVE MATERIALS MANUFACTURING GROWTH

Investments in value-added adjacencies add to TAM

Core/Historical

Current state/Future scaling growth via capex and M&A

CONSTRUCTION

Wood Components

Light Gauge Metal Components Aluminum Balconies and accessories

RETAIL

Pressure-Treated Lumber

Deckorators SurestoneTMTechnology Decking & Railing

PACKAGING

Wood Crates

Mixed Material Crates Steel Crates

Wood, Foam, Metal, Corrugate

BROADER MARKET OPPORTUNITIES | MARGIN ENHANCEMENT | INCREASED WALLET SHARE

INNOVATION AND NEW PRODUCTS

UFP Venture Fund

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 external growth through

late-stage development and early-stage commercialization opportunities

Empower entrepreneurs to build businesses, services, and products that can transform our industry

Commit an investment of $100 million over 5 years to meet our development goals

The company is making investments to

Develop value-added use of manufacturing residuals

Enhance our supply chains

Add automation across business segments to increase efficiencies

Address a shortage of skilled labor

Create alternative product lines in close adjacencies to our current business

Source new technology solutions to spur growth and enhance productivity

Commitment to innovation moves the company steadily up the value chain. 13

BUSINESS SEGMENTS

Q1 2025 TTM Net Sales

ProWood Group

$2.3 Billion

Deckorators

$2.6B $289 Million

Other

$8 Million

Commodity

45%

Value Added

55%

New products 8.4% of net sales

Q1 2025 TTM Net Sales

Structural Packaging

$1.0 Billion

PalletOne

$1.6B $520 Million

Protective Packaging

Solutions

$76 Million

Commodity

24%

Value Added

76%

New products 12.0% of net sales

Q1 2025 TTM Net Sales

$2.1B

Site Built

$844 Million

Factory Built

$841 Million

Commercial

$251 Million

Concrete Forming

Solutions

$176 Million

Commodity

13%

Value Added

87%

New products 4.1% of net sales

TREATED & DECK SPECALTIES

Pressure-treated lumber, decking, handrail, stairs, balusters, lattice, accessories

FENCE, LAWN & GARDEN

Wood and vinyl fence, planters, garden beds, picnic tables

BUILDING MATERIALS

ProWood FR, project panels, short boards & dimensional, stakes, finger-joint studs, furring strips, more

Wood- and mineral-based composite decking, railing and accessories.* Aluminum fence manufacturing and fabrication.

Premium siding, pattern, trim; interior accent wall products

On-trend brands to all major building products retailers, backed by best-in-class in-store and e-commerce support

*Sales mix is 73% to Big Box customers and 27% to one- and two-step distribution as of Q1 2025 YTD.

Wood, steel, foam and corrugated for mixed material crates and specialty containers; hard cases, lumber processing, logistics solutions and onsite packaging services

Machine-built pallets; design,

engineering and testing

Corrugated conversion, stretch/shrink films, labels, strapping, hardware and software solutions for all industries

Roof trusses, wall panels, floor systems and framing services for residential and light commercial builders. Sales are approx. 70% single family, 30% multifamily.

Floor, wall and roof panels, cabinet components, countertops and milled components for modular and manufactured homes; Components for RV/cargo trailer and mobile offices.

Turnkey project management of consumer environment and architectural interiors; design, development, engineering, manufacturing, assembly, distribution and installation.

Offsite prefabrication of value-add formwork, aluminum horizontal shoring and vertical forming solutions for use in infrastructure; elevated structural concrete construction projects.

UFPConstruction.com

IDXCorporation.com

questdisplays.com

SEGMENT DEMAND AND FORWARD OUTLOOK

MACRO DRIVERS

Repair and remodel activity

Aged housing stock

Housing turnover

PMI

Durable Goods

GDP

Affordability challenges remain

Housing shortage

Mortgage rates

INDUSTRY/CONSUMER TRENDS

Home equity at historic highs, but HELOC rates elevated as well

Consumers delaying larger projects

Lock-in mortgage effect

Demand decrease across most verticals and excess capacity pressuring pricing

On/nearshoring manufacturing

Vendor consolidation at customers of scale

Smaller new build floorplans

Builder incentives driving activity

Depressed mortgage application and refinance activity

SHORT-TERM OUTLOOK

Demand down low-single digits

Pricing pressures

Demand down low-single digits

Pricing pressures

Demand down low-single digits

Pricing pressures

SUSTAINABILITY CONTINUUM

We believe profitability, asset values and shareholder return are optimized by acting responsibly, and that our investors experience higher sustainable returns when we support our customers, employees and communities. Our views on ESG and maintaining a sustainable enterprise can be found here.

Provide

significant opportunity

for professional and personal growth

Cultivate

a unique, rewarding culture throughout the UFP family of companies

Drive

operational excellence throughout the enterprise

Maintain

inclusive, safe working environments

Deliver

Consistent, positive

financial results to our shareholders

Support

communities in which we operate

Supply

exceptional products from sustainable sources

Operate

with a focus on energy efficiency and lean

manufacturing

Attract

and retain diverse top-shelf talent

FINANCIALS

OUR PERFORMANCE

Net Sales

28%

(9)%

(1)%

(2)%

$8,636

$9,627

$7,218

$6,652

$6,609

Adjusted EBITDA

31%

94%

(26)%

(16)%

(6)%

$835 $1,097 $810

$682

$644

Net Earnings (ACI)

29%

117%

(26)%

(19)%

(10)%

$536 $693 $514

$415

$373

Capital Resources

$832 $960

$512

$643

$551

$805

$1,836

$2,362

$2,459

$2,191

$ in Millions

Adjusted EBITDA Margin

ROIC

Unit sales

growth rate

Growth rate

Operating Cash Flow

15.5%

18.3%

22.2%

34.6%

31.9%

9.7%

10.3%

11.2%

11.4%

9.7%

Q1 2025 TTM

2024

2023

2022

2021

Liquidity

Strong track record of growth and performance improvement with emphasis on improving gross profit dollars per unit sold and ROIC.

Q1 2025 TTM Adjusted EBITDA Margin exceeds 2019 by 250 bps.

Non-GAAP Financial Information: Please visit ufpinvestor.com for reconciliation to related GAAP measurement.

50%

Level of lumber prices does

not drive profitability

40%

Sequential trends impact

profit per unit

30%

20%

Balanced mix of variable and fixed-

price products mitigate risk

10%

2021

2022

2023

2024

Q1 2025 TTM

*Standard deviation of lumber prices divided by average weekly price.

Lumber Market Volatility

Adjusted EBITDA Margin

8.3%

5.8%

6.1%

9.7%

10.3%

11.2%

11.4%

9.7%

39.9%

Lumber Market Volatility*

Adjusted EBITDA Margin

MANAGING LUMBER MARKET RISK

Non-GAAP Financial Information: Please visit ufpinvestor.com for reconciliation to related GAAP measurement.

NET SALES (in millions)

UFP Consolidated

$9,627

$8,636

$7,218

28%

$6,652

$6,609

(1)%

(9)%

(10)%

(1)%

(2)%

2021

2022

2023

2024

Q1 2025 TTM

UFP Retail Solutions

$3,535 $3,771

31% $2,956

$2,598

$2,577

(4)%

(3)%

(6)%

(7)%

(5)%

2021

2022

2023

2024

Q1 2025 TTM

UFP Packaging

$2,395

$2,148

40%

$1,838

$1,637

$1,622

(1)%

(2)%

(6)%

(8)%

(3)%

(2)%

(3)%

2021

2022

2023

2024

Q1 2025 TTM

UFP Construction

$3,144

$2,698

17%

$2,161

(13)%

$2,114

$2,112

14%

2021

2022

2023

2024

Q1 2025 TTM

Net Sales

Total Unit Sales Growth

Organic Unit

Sales Growth

LONG-TERM GOAL

Unit sales growth of 7% to 10%, including small acquisitions

ADJUSTED EBITDA (in millions)

UFP Consolidated

$1,097

$835

$810

$682

$317

9.7%

11.4%

11.2%

10.3%

$644

9.7%

7.2%

2019

2021

2022

2023

2024

Q1 2025 TTM

UFP Retail Solutions

$217

$198

$208

$221

$201

8.5%

7.8%

$75

5.6%

5.8%

7.0%

5.0%

2019

2021

2022

2023

2024

Q1 2025 TTM

Adjusted EBITDA Adjusted EBITDA Margin

Consolidated Q1 2025 TTM Adjusted EBITDA Margin exceeds 2019 by 250 bps.

LONG-TERM MARGIN DRIVERS

New management structure; Value-added mix improvements, including new branded products, solutions selling, and value-based pricing; Operational improvements, technology, and automation

LONG-TERM GOAL

12.5% Adjusted EBITDA margin

Non-GAAP Financial Information: Please visit ufpinvestor.com for reconciliation to related GAAP measurement. 24

UFP Packaging

$300

$376

$244

$159

$101

9.3%

14%

15.7%

$150

13.3%

9.7%

9.2%

2019

2021

2022

2023

2024

Q1 2025 TTM

UFP Construction $422

$283

$272

$208

$192

$96

5.9%

10.5%

13.4%

12.6%

9.9%

9.1%

2019

2021

2022

2023

2024

Q1 2025 TTM

UFP Consolidated

100%

80%

60%

40%

20%

-20%

-40%

28%

31%

(26)%

(16)%

(6)%

2021 2022 2023 2024 Q1 2025

TTM

(2)%

(1)%

(9)%

94%

UFP Retail Solutions

50%

40%

30%

20%

10%

-10%

-20%

31%

10%

(4)%

(5)%

(6)%

2021 2022 2023

(7)%

2024

(9)%

Q1 2025 TTM

Percent Growth

ADJUSTED EBITDA GROWTH AND UNIT SALES

Adjusted EBITDA Growth Unit Sales Growth

UFP Packaging

230%

190%

150%

110%

70%

200%

30%

-10%

-50%

25%

40%

(1)%

(6)%

(35)%

(3)%

(35)%

(3)%

(6)%

2021 2022 2023 2024 Q1 2025

TTM

UFP Construction

230%

190%

150%

110%

70%

30%

-10%

-50%

189%

49%

17%

(13)%

(36)%

(24)%

(8)%

2021 2022 2023 2024 Q1 2025

TTM

Percent Growth

Non-GAAP Financial Information: Please visit ufpinvestor.com for reconciliation to related GAAP measurement. 25

BALANCED USE OF FREE CASH FLOW

Acquisitions to contribute half of our total annual unit sales growth

CapEx plan of $300M to $350M in 2025 Opportunistic share repurchases and

to offset issuances. Current authorization as

$40

$68

$59

$82

$81

$82

$96

$151

$159

$192

$180

$174

$52

$232

$180

$250

$476

(in millions)

Acquisitions Capex

Share Buyback Dividends

OCF

$34

of April 2025 has $122M remaining, expires

July 31, 2025.

Increasing dividends in line with long-term growth in earnings and free cash flow

$512

$832

$960

$643

$30

$551

Committed to maintaining conservative capital structure with adjusted EBITDA <1.5x

2021 2022 2023 2024

Q1 2025 TTM

RETURN ON INVESTED CAPITAL

40%

35%

30%

Percent

25%

20%

15%

10%

31.9%

22.2%

18.3%

15.5%

34.6%

2021 2022 2023 2024 Q1 2025 TTM

Hurdle Rate = 15% WACC = 10%

Non-GAAP Financial Information: Please visit ufpinvestor.com for reconciliation to related GAAP measurement.

RECENT ACQUISITIONS

Identify attractive growth runways in each Business Unit under each Business Segment and identify gaps in our capabilities to pursue those runways.

Process

Find new products and services to speed our transformation from commodity sales to value-added selling solutions and brands.

Purpose

Achieve scale and synergy targets to

optimize growth, margins and returns.

Goal

Scale, low-cost production, automation;

increased customer wallet share.

Driving Deckorators recycle content;

scaling opportunity.

Securing supply and margin expansion for

growing Packaging business.

Percent

CAPITAL STRUCTURE

Net Debt to Total Capital

Net Debt to TTM Adjusted EBITDA

Max target

Net Debt to Total Capitalization vs Maximum Target

Net Debt to Adjusted EBITDA vs Maximum Target

45%

2.5

40%

35%

2.0

30%

25%

1.5

20%

1.0

15%

10%

0.5

0.0

2021

2022

2023

2024

Q1 2025

2021

2022

2023

2024

Q1 2025

0.1

0.0%

2.5%

Non-GAAP Financial Information: Please visit ufpinvestor.com for reconciliation to related GAAP measurement.

STOCK PERFORMANCE

25%

20%

15%

10%

6.1%

6.2%

-1.2%

3.3%

-5%

-6.9%

-10%

-15%

-20%

-25%

1 Year

3 Year

5 Year

10 Year

20 Year

UFPI

Peer Group Average

SP500

R.2000

-19.7%

7.7%

9.1%

9.0%

12.3%

10.3%

11.9%

15.3%

9.5%

12.1%

12.6%

15.2%

20.1%

21.0%

Annual % Return

Long-term returns on UFPI stock are consistently above the proxy peers and major market indices

Peers include MAS, BLDR, TREX, LPX, SSD, BCC, PATK, AMWD, SON, GEF, ROCK

Stock prices are adjusted to account for dividend payouts

Source: FactSet as of 4/29/2025 closing prices

Disclaimer

UFP Industries Inc. published this content on April 30, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 30, 2025 at 17:33 UTC.