APOGEE ENTERPRISES, INC. Apogee Enterprises, Inc.
Nasdaq: APOG
Fiscal 2024 Fourth Quarter Earnings Call
April 18, 2024
5050 Syracuse | Denver, CO | © JC Buck/Black Bike Productions LLC
Non-GAAP measures & forward-looking statements
This presentation contains non-GAAP financial measures which the company uses to evaluate the Company's historical and prospective financial performance, measure operational profitability on a consistent basis, as a factor in determining executive compensation, and to provide enhanced transparency to the investment community. Definitions for these non-GAAP financial measures are included in today's press release and reconciliations to the most directly comparable GAAP measures are included at the end of this presentation.
This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "intend," "estimate," "forecast," "project," "should" and similar expressions are intended to identify "forward-looking statements". These statements reflect Apogee management's expectations or beliefs as of the date of this presentation. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements are subject to significant risks that could cause actual results to differ materially from the expectations reflected in the forward-looking statements. More information concerning potential factors that could affect future financial results is included in today's press release, the company's Annual Report on Form 10-K for the fiscal year ended February 25, 2023, and in subsequent filings with the U.S. Securities and Exchange Commission.
Q4 FY2024 Earnings April 18, 2024 | Apogee Enterprises, Inc. | 2 |
Agenda
Introductory remarks
Ty Silberhorn
Chief Executive Officer
Financial results and outlook
Matt Osberg
Chief Financial Officer
Q&A
University of Washington,
Nanoengineering & Sciences Building | Seattle, WA
Q4 FY2024 Earnings April 18, 2024 | Apogee Enterprises, Inc. | 3 |
Executing our Enterprise Strategy
Create Peak Value by
building
differentiated
businesses with
strong
operational execution
ECONOMIC | ACTIVELY | STRENGTHEN | ||
LEADER | MANAGE | CORE | ||
IN TARGET | THE PORTFOLIO | CAPABILITIES & | ||
MARKETS | PLATFORMS | |||
F O U N D A T I O N A L E N A B L E R S | ||
• | Results-driven Culture | • Apogee Management System (AMS) |
• | Talent Development | • Best-in-class Governance |
Q4 FY2024 Earnings April 18, 2024 | Apogee Enterprises, Inc. | 4 |
Full-Year FY2024 Highlights
- Record adj. operating income and adj. diluted EPS
- Record cash flow generation
- Achieved step change in Architectural Glass performance
- Delivered sustainable cost and productivity gains
- Grew our mix of differentiated offerings
Net sales | $1.42 B |
(2)% year-over-year |
Adjusted | $146.2 M | |
operating | ||
income* | +16% year-over-year | |
Adjusted | $4.77 |
diluted EPS* | +20% year-over-year |
- Continued to strengthen core capabilities
Cash flow | $204.2 M |
from | |
operations | +99% year-over-year |
Strong progress to advance our strategy
Q4 FY2024 Earnings April 18, 2024 | Apogee Enterprises, Inc. | Note - FY2024 included an additional week of operations compared to FY2023 | |
*Non-GAAP metric, see reconciliation table | 5 | ||
Driving Progress Toward our Financial Targets
Fiscal 2025 Enterprise Targets
- 12%
Adjusted ROIC*
16.5%
13.8% ✓
Target
7.7% 8.1%
(announced at our Nov 2021 investor day)
> 10% | > 1.2x | |
Adjusted | Construction Index | |
Revenue Growth | ||
Operating Margin** | ||
10.7%
Target | 10.3% | ||
8.7% | ✓ | ||
7.1% | 6.3% |
-1.6%
FY21 FY22 FY23 FY24
*Adjusted ROIC is a non-GAAP metric, see appendix for a reconciliation.
FY21 FY22 FY23 FY24
**Adjusted operating margin is a
non-GAAP metric, see appendix for a reconciliation.
Non-Res | FY24 Apogee |
Construction*** | Revenue |
***Growth in the value of non-residential building construction put in
Q4 FY2024 Earnings April 18, 2024
Apogee Enterprises, Inc.
place in calendar 2023, as reported by the U.S. Census Bureau.
6
Segment Margin Performance
Framing
Systems
Glass
Services
LSO
Q4 FY2024 Earnings April 18, 2024
SEGMENT ADJUSTED | FY2024 |
OPERATING MARGIN TARGET | RESULTS* |
9-12% 10-15%11.8%
Increasing our target margin range for Framing Systems
10-15%18.0%
7-9%3.8%
20%+ | 24.4% | |
*Segment adjusted operating margin is a | ||
Apogee Enterprises, Inc. | non-GAAP metric, see appendix for a reconciliation. | 7 |
Market Outlook
FMI forecast for construction put in place in the U.S. by building type
Building Type | Forecasted 2024 | Forecasted Put-in-Place |
Growth Rate | Spend ($ billions) | |
Multifamily residential | -8% | $133 |
Office (excluding data centers) | -2% | $74 |
Commercial | -2% | $130 |
Health care | +8% | $69 |
Educational | +9% | $127 |
Lodging | +14% | $27 |
Amusement & recreation | +7% | $35 |
Transportation | +10% | $70 |
Source: FMI 2024 North American Engineering and Construction Outlook, April 2024
Shifting market dynamics driving continued focus on diversifying our project mix
Q4 FY2024 Earnings April 18, 2024 | Apogee Enterprises, Inc. | 8 |
Continuing to Execute our Strategy - Project Fortify
Project Fortify was announced on January 30, 2024 and will position Framing Systems for continued profitable growth, as well as optimize processes and streamline resources in the Services and Corporate Segments
- Phase out lower-margin product offerings
- Consolidate Framing Systems into a single operating entity
- Further optimize our manufacturing footprint
- Simplify our brand portfolio & commercial model
- Focus on higher-growth,higher-margin opportunities
- Expected annualized cost savings of $12-$14 million
Q4 FY2024 Earnings April 18, 2024 | Apogee Enterprises, Inc. | 9 |
Advancing the Apogee Management System
- multi-yearapproach for building an operating framework and tools to support a culture of excellence
Lay the foundation
- Add key talent
- Reinvigorate Lean
- Apply 80/20
- Build foundation in Architectural Glass
- Focus on generating bottom-line benefits immediately
- Build organizational alignment
Expand the scope
- Expand toolkit to other businesses
- Go beyond Lean:
- Culture & values
- Voice of customer
- Value chain optimization
- Built in quality
- Productivity hoppers
- Grow AMS talent base
Embed in the culture
- Shared language & philosophy
- Common tools & processes
- AMS embedded into talent management
- Playbook for integrating acquired businesses
Q4 FY2024 Earnings April 18, 2024 | Apogee Enterprises, Inc. | 10 |
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Disclaimer
Apogee Enterprises Inc. published this content on 17 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 April 2024 15:20:08 UTC.
