Worthington Enterprises (WOR) Baird 55th Annual Global Industrial Conference summary

Company Overview and Recent Transformation

• Completed a spinoff in December 2023, separating from the steel business to focus on building and consumer products.

• Achieved $1.2 billion in sales and $280 million in Adjusted EBITDA for the last 12 months, up 20% year-over-year.

• Operates in niche markets with strong market share, emphasizing a people-first, performance-based culture and low employee turnover.

• Maintains a long-term focus, prioritizing sustainable growth, resilience, and disciplined capital stewardship.

• Building products account for 58% of revenues, with significant contributions from joint ventures in ceiling grids and steel framing.

Business Segments and Market Positioning

• Building products include heating, cooking, cooling, construction, water systems, and HVAC components, focusing on repair, remodel, and maintenance markets.

• Consumer products feature tools, torches, outdoor living, and celebration products, with major customers like Walmart, Home Depot, and Lowe's.

• Holds leading market positions in most product categories, with over 80% of adjusted EBITDA from brands where it is number one in the market.

• Joint ventures (Wave and ClarkDietrich) provide equity income and are structured to mirror EBITDA through dividends, with over $700M in combined FY25 net sales.

• Recent acquisitions include Elgin/Elgen (HVAC components), Rigasco (Norway), and Halo (outdoor cooking equipment), expanding exposure in commercial HVAC, European, and outdoor markets.

Strategic Priorities and Growth Initiatives

• Growth strategy centers on the Worthington Business System, emphasizing continuous improvement, lean manufacturing, and innovation.

• Focuses on understanding customer pain points and innovating to better serve them, including IoT-enabled propane sensors and corrosion-resistant cylinders.

• M&A remains a core strategy, targeting high-margin, high-growth, low-capital-intensity businesses in niche markets.

• Facility modernization projects are ongoing, with elevated CapEx expected through fiscal 2026 before normalizing.

• Long-term financial targets include 6-8% sales growth, 24% EBITDA margins, gross margins above 30%, and SG&A below 20% of sales.