Stella-Jones (SJ) investor relations material

Executive summary

• Q2 results showed disciplined execution, with EBITDA at $189M (18.3% margin) despite softer volumes and lower pricing in key segments.

• Acquisitions of Rockwell and Locweld expanded presence in steel transmission structures, supporting future growth.

• Integration of Rockwell and operational investments to increase production capacity are progressing well, with early benefits realized.

• Fire at Brierfield, Alabama facility was managed swiftly, minimizing operational impact.

• Available liquidity stood at ~$700M at quarter-end, supporting ongoing strategic initiatives.

Financial highlights

• Q2 sales were $1,034M, down 1% year-over-year, with organic sales down 4% mainly due to lower railway tie volumes.

• Utility pole sales reached $476M, down 4% organically; volumes down 2% with pricing decline due to mix.

• Railway tie sales fell 11% organically to $240M, mainly due to lower volumes and customer insourcing.

• Residential lumber sales were $246M, stable year-over-year, with improved demand in June.

• Cash from operations was $224M, up from $177M in Q2 last year, driven by inventory reductions.

Outlook and guidance

• 2025 sales guidance revised to ~$3.5B (from ~$3.6B), reflecting lower organic growth in utility poles and railway ties.

• Utility pole sales outlook for H2 reduced to low single digit growth, with railway tie sales expected to decline low single digits year-over-year.

• Residential lumber sales expected within $600M–$650M for the year, with positive volume trends.

• EBITDA margin target above 17% for 2025 is maintained; EBITDA CAGR for 2023–2025 now expected at 11%.