Resideo Technologies (REZI) Raymond James TMT and Consumer Conference summary

Company overview and business structure

• Spun off from Honeywell six years ago, combining ADI (commercial distribution) and P&S (residential products) businesses.

• 2023 revenue: P&S at $2.6B, ADI at $3.6B, with Snap One adding $1.1B revenue and $100M EBITDA.

• Focused on serving professionals in residential and commercial markets with products like security panels, thermostats, and fire detectors.

• Value creation has centered on optimizing gross margins, especially in P&S.

• Recent tailwinds from residential housing recovery and commercial market growth.

Market trends and demand

• Residential new home building is rebounding, with most products installed at project completion.

• Remodel market not tied to resale is stable, while resale-driven remodels remain compressed.

• Commercial segment shows growth, mainly in office-related projects and share capture by ADI.

• EMEA faces regulatory-driven constraints, but trends are otherwise similar to domestic markets.

Snap One acquisition and integration

• Snap One acquisition finalized in June, after years of strategic discussions.

• Merger brings cost, revenue, and margin synergies, with $75M in targeted synergies over three years.

• Integration: people aspects completed, technology and real estate consolidation ongoing, expected to take three years.

• Combined customer base expands proprietary product reach, leveraging ADI’s 100,000+ customers.

• Margin profiles: ADI at 7-8% EBITDA, Snap historically higher due to proprietary brands.