Stella-Jones (SJ) investor relations material

Strategic vision and growth priorities

• Strategy centers on being a future-ready, agile supplier to utility and railroad industries, expanding into steel structures, tubular steel poles, composites, and value-added services.

• Recent acquisitions (Lockwell, Brooks) and $350M in M&A since 2022 have broadened offerings, enabling entry into steel transmission structures and crossarms, with plans to double steel capacity to 20,000 tons by mid-2026 and consider a U.S. greenfield plant.

• Investments include $130M in growth capex since 2022, targeting new markets and leveraging customer relationships and distribution network.

• Emphasis on operational excellence, innovation, and technology adoption, including automation, AI, and ERP systems to drive efficiency and scalability.

• Sustainability and ESG initiatives are integral, with clear GHG reduction targets, indigenous partnerships, and enhanced risk governance.

Financial performance and guidance

• Sales reached $3.5B in LTM Q3 2025, growing at a 4.5% CAGR since 2022, with infrastructure products now 80% of sales and 25 consecutive years of top-line growth.

• EBITDA margin improved from 14.6% in 2022 to 17.9% in LTM Q3 2025, with a 12% CAGR since 2022 and expected to remain at 17.5%-18.5% through 2028.

• EPS grew at a 13% CAGR since 2022, with new guidance targeting over 10% EPS CAGR for 2026-2028, outpacing sales growth.

• Sales expected to reach $4B by 2028, with wood utility poles at ~50% of sales and recent acquisitions contributing $225M annually.

• Free cash flow generation totaled ~$600M since 2023, supporting $300M+ in share repurchases and consistent dividend increases.

Market trends, opportunities, and business drivers

• North American utility and rail markets are entering a multi-year period of elevated CapEx, driven by grid hardening, electrification, and replacement of aging infrastructure.

• Utilities' CapEx plans are rising rapidly, with $1.4T to be spent in North America over five years; demand for larger, higher-class poles and steel structures is increasing.

• Leading supplier in $3B wood utility pole and $1.5B steel structures markets, addressing deferred maintenance and grid resiliency needs.

• Competitive advantages include long-term contracts, diversified supply chain, logistics agility, and deep customer relationships across 46 facilities.

• Expanding into adjacent markets such as alternate pole materials, hardware, substation structures, and composite tie solutions.