Resideo Technologies (REZI) 47th Annual Raymond James Institutional Investor Conference summary

Company overview and business segments

• Operates two main segments: Products and Solutions (P&S) focused on residential control and sensing products, and ADI Global Distribution, the largest low voltage security distributor globally.

• P&S includes brands like Honeywell Home thermostats, First Alert detectors, and OEM combustion products, with a strong focus on professional installers and near-shore manufacturing.

• ADI generates about 70% of revenue from commercial customers and 30% from residential, with a strong omni-channel and digital-first approach.

• ADI serves 100,000 professional installer customers, carries 1,000 brands, and operates mainly in the Americas, with additional presence in Europe, Australia, and APAC.

• Both segments have demonstrated consistent mid to high single-digit growth and strong operating profit performance.

Financial performance and key metrics

• Top-line growth is closely tied to housing market cycles for P&S, with opportunities to gain share in all served segments.

• Achieved 11 consecutive quarters of year-over-year margin accretion in P&S, driven by supply chain integration and operational efficiencies.

• ADI benefits from higher margins on online sales and exclusive branded products, which now represent a double-digit percentage of business.

• Recent quarter results were slightly ahead of expectations, with ADI overcoming system conversion headwinds and P&S managing HVAC market disruptions.

• Guidance for the coming year is approximately 5% top-line growth, with continued gross margin expansion and EBITDA improvement, especially as a major environmental liability settlement boosts cash flow.

Strategic initiatives and separation process

• The company is in the process of spinning off ADI and P&S into two independent, publicly traded entities, targeting completion in the second half of the year.

• Separation is driven by the distinct operational and financial characteristics of each business, enabling focused strategy and capital allocation.

• Both businesses are expected to maintain similar capital allocation strategies post-spin, with a focus on deleveraging to below 2x net leverage and pursuing disciplined M&A.

• The spin will allow each entity to invest more directly in its own growth and return capital to shareholders.

• Investor day is planned prior to the spin to provide further details and milestones.