Simpson Manufacturing (SSD) D.A. Davidson's 23rd Annual Diversified Industrials & Services Conference 2024 summary

Business overview and market positioning

• Supplies structural solutions to five end-use markets, with residential as the largest and about 50% of business tied to housing starts.

• Offers a broad product line: connectors, fasteners, anchors, truss plates, and digital solutions, positioning as a one-stop shop.

• Maintains strong relationships with builders, code officials, and channel partners, driving demand through specifications and codes.

• Delivers rapid service with over 10,000 SKUs, typically shipping orders same day for next-day delivery.

• Outperformed U.S. housing starts by 250 basis points over eight years, and 800 basis points in the last two years.

Market trends and customer dynamics

• Expects another year of declining housing starts, finishing near 1.4 million units, similar to 2020 levels.

• Larger production builders remain strong, while smaller builders and multifamily segments struggle; recent rate cuts may benefit smaller builders over time.

• Maintains heavy SG&A and CapEx investment to be ready for market recovery and support single-source customers.

• National retail business outperforms peers by focusing on complementary products, in-store merchandising, and digital solutions.

Product and channel strategy

• Growth in truss plate/component manufacturing driven by improved software and service, capitalizing on competitor challenges.

• Software investments, both internal and through partnerships/acquisitions, enhance customer experience and business model stickiness.

• Fastener business focuses on engineered solutions, product differentiation, and trade show engagement to drive adoption.

• Shifted sales approach from product-focused to end-market-focused, leveraging relationships for broader product placement.