The AZEK Company (AZEK) Baird 2024 Global Consumer, Technology & Services Conference summary

Business overview and market position

• Operates as the largest vertically integrated recycler of PVC, converting recycled materials into decking, rail, and exterior trim products.

• Holds leading market share in both decking and cellular PVC trim, with strong brand recognition, especially in the Northeast.

• Achieves double-digit growth rates, with a 10-year CAGR between 12% and 16%.

• EBITDA has more than doubled in recent years, supported by market conversion from wood to composite materials.

Strategic initiatives and growth drivers

• Focuses on driving market conversion from wood to composite through portfolio and marketing.

• Pursues annual product innovation, channel expansion, and brand building to secure and grow its customer base.

• Retail channel expansion has been a key growth area, now representing about 15% of business, with potential to reach 20%.

• M&A activity is focused on tuck-in acquisitions that complement the existing business model.

Consumer and market trends

• Core customer base is mature, affluent homeowners, leading to steady demand despite broader market fluctuations.

• DIY segment through retail is growing, masking any potential weakness in that channel.

• Exteriors business, about 30% of revenue, targets significant wood conversion opportunities and new siding products.