Stella-Jones (SJ) 47th Annual Raymond James Institutional Investor Conference summary

Business evolution and strategic focus

• Transitioned from commodity wood producers to specialty infrastructure products and distribution, with a focus on utility and rail industries.

• Operates 46 facilities across North America, servicing major utilities and railroads, with 90% of business driven by maintenance needs.

• Infrastructure products now represent 80% of sales, up from 69% three years ago.

• Long-term contracts cover 75% of sales, with increasing contract lengths and some extending beyond 10 years.

• Strategic vision shifted to being a supplier of infrastructure products for electrical and rail industries, expanding into steel and related products.

Financial performance and capital allocation

• Sales have grown at a 4% CAGR and EPS at a 13% CAGR over the past three years.

• EBITDA margin improved by 300 basis points to 18%, maintained for three years.

• Over CAD 600 million in free cash flow generated in three years; CAD 500 million returned to shareholders via dividends and buybacks.

• Dividend increased for 22 consecutive years; target leverage maintained at 2-2.5x with investment grade credit rating.

• New guidance targets 4%-5% annual sales growth to reach CAD 4 billion by 2028, with 10% EPS CAGR and EBITDA margin between 17.5%-18.5%.

Growth initiatives and M&A

• Expanded utility products division to include steel transmission towers and crossarms, with plans for further product diversification.

• Recent acquisitions (Locweld, Brooks) broaden product offerings and customer reach, with integration focused on unified branding and sales approach.

• Greenfield facility announced in the U.S. to double steel lattice capacity to 20,000 tons, with capacity sold out for 2026 and 2027.

• Six U.S. utilities expressed interest in new U.S. facility; first U.S. lattice manufacturer to avoid tariffs and meet Buy American requirements.

• M&A remains a key growth lever, with focus on accretive deals and expanding into new infrastructure product segments.