Workflow
JELD-WEN(JELD) - 2024 Q4 - Earnings Call Transcript
JELDJELD-WEN(JELD)2025-02-18 15:25
Filings
Slide

Financial Data and Key Metrics Changes - Fourth quarter revenue was 896million,down12896 million, down 12% year-over-year, primarily due to lower core revenues and a shift towards more affordable options [15][22] - Adjusted EBITDA for the quarter was 40 million, a decline of 47millionfromtheprioryear,resultinginanadjustedEBITDAmarginof4.547 million from the prior year, resulting in an adjusted EBITDA margin of 4.5% [16][18] - Free cash flow in the fourth quarter was a use of 28 million, with net debt leverage ratio increasing to 3.8 times, above the target range of 2 to 2.5 times [16][17] Business Line Data and Key Metrics Changes - North America segment generated 640millioninrevenueforthefourthquarter,a14640 million in revenue for the fourth quarter, a 14% decline year-over-year, with adjusted EBITDA declining to 42 million from 94million[19][20]−Europesegmentrevenueforthefourthquarterwas94 million [19][20] - Europe segment revenue for the fourth quarter was 256 million, with adjusted EBITDA of 17million,reflectinga617 million, reflecting a 6% decline in core revenues but improved adjusted EBITDA by 1 million [20][21] Market Data and Key Metrics Changes - The overall market remains soft, with consumers trading down and delaying larger remodeling projects, impacting volume and mix [12][13] - Housing starts have remained stable, but there has been a significant decline in multi-family and higher-end home construction, affecting specific business lines [12][13] Company Strategy and Development Direction - The company is focusing on transformation initiatives, delivering approximately 115millioninbenefitsin2024,whileimplementingcostreductioninitiativestoimproveefficiency[10][13]−AcomprehensiveprogramtooptimizetheNorthAmericannetworkisbeinglaunchedtoalignwithlong−termcommercialstrategy,includingfacilityconsolidationandautomationinvestments[29][30]Management′sCommentsonOperatingEnvironmentandFutureOutlook−ManagementanticipatescontinuedvolatilityinNorthAmericaduetopotentialtariffs,highinterestrates,andnewhomeinventoryatadecadehigh[26][27]−For2025,thecompanyexpectsnetrevenuestorangebetween115 million in benefits in 2024, while implementing cost reduction initiatives to improve efficiency [10][13] - A comprehensive program to optimize the North American network is being launched to align with long-term commercial strategy, including facility consolidation and automation investments [29][30] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued volatility in North America due to potential tariffs, high interest rates, and new home inventory at a decade high [26][27] - For 2025, the company expects net revenues to range between 3.2 billion and 3.4billion,reflectingaprojected43.4 billion, reflecting a projected 4% to 9% decline in core revenues [35][36] Other Important Information - The company plans to adjust capital expenditures to approximately 150 million, considering expected elevated leverage levels by year-end [36][37] - The first quarter of 2025 is expected to be particularly challenging, with anticipated sales between 750millionand750 million and 775 million and adjusted EBITDA of approximately 20 million [39][40] Q&A Session Summary Question: Earnings progression from Q1 to Q2 - Management indicated that near-term actions and transformation initiatives will begin to take effect in Q2, leading to expected normal seasonality [55][56] Question: Price cost standpoint and tariffs - Management confirmed that the 50 million cost headwind does not account for any potential tariffs, and they are modeling scenarios for the evolving tariff landscape [60][63] Question: Confidence in achieving savings - Management expressed confidence in achieving the 100milliontransformationsavings,with80100 million transformation savings, with 80%-85% of the initiatives already in progress [71][72] Question: Organic efforts to regain market share - Management is focusing on improving sales effectiveness and service levels to regain market share lost in previous years [85][88] Question: Corporate costs and headwinds - Management noted a 15 million to $20 million headwind in corporate costs due to reinstated variable compensation in 2025 [115][116] Question: Mix pressure and pricing - Management believes the mix pressure is predictable and that they will work hard to control costs while passing through necessary price increases [122][123]