Earnings call transcript Q1 2023

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Operator

Thank you for standing by. My name is Kayla Baker, and I will be your conference operator today. At this time, I would like to welcome everyone to the JELD-WEN Holding, Inc.

First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers' the will question-and-answer be After [Operator Instructions]

like I Relations, call to over now James to Investor the of turn would President the Armstrong. Vice

James Armstrong

earnings issued you, presentation slide be Investor our first Thank found morning. of the night We portion which good quarter posted and to XXXX website, release Relations a at last and our can investor.jeld-wen.com.

this We call. our will presentation be during referencing

Julie by Bill Christensen, Albrecht, and Chief joined Officer; Financial I'm Today, Executive Officer. Chief

in to over that of to our Private for that Bill, certain provided release guidance within with including Before forth our we remind I to like any will statements everyone XX-Q Reform not XXXX. this filed statements, would certain providing the and turn earnings subject Forms are constitute to a we SEC. and call, to with Act uncertainties, it in statements Securities expectations Litigation the during JELD-WEN does of I duty variety the statements These future meaning are the make results. undertake of those forward-looking risks and XX-K forward-looking including update set respect

earnings financial our with during information in Presentation substitute Additionally, in we and non-GAAP presentation. evaluating comparable GAAP to calculated measures discuss measures our which in release directly of accordance believe of GAAP. most or results call, for under our can prepared be A reconciliation non-GAAP considered of in the useful their these earnings this will we additional can in appendix found be should be a not measures, isolation today's performance. as

to call Bill. to like would now that, With the turn over I

Bill Christensen

strengthen to expected. I'm the our solid are our making measures world, we our progress that our and for joining than our simplify Thank you, James, we balance thank sheet. and in to our better report the employees improve Thanks structure quarter to around call first short-term cost on came today. business, everyone, happy you,

service improving during reduced macro costs very During uncertain quarter, to while environment. a all our the we customers,

the year in expectations. to highlights Turning first sales coming quarter our both our with X. We and began earnings on Slide above

the During as as demand outperformed expected price down not however, year-over-year, our first soft plan cost. and quarter, for we was

steps like improving in-full our while deliveries. still also Julie on-time, minutes. inventories took performance more few metrics about in our satisfaction will customer rightsize to talk We in a financial depth

Turning to X. Slide

culture approach, and We We're two-pronged performance paying both structured making our and close framework as emphasis operational strengthening capabilities. initiatives. to value people, short business long-term This both of continue margin as the on by active to efficiency the organizational is on an to with with strategy. and the good in focus on attention the well transformation creation through augmented foundation expansion a of the around progress plans deliver deployment

establishing accountability, improvement. rationalizing value improvement finally, are our of business delivering down targets pushing the are projects global fund focused footprint activities. support We And and will sourcing around line improved detailed we and flow that our to cash commercial our creation margin on excellence

consistent and deliver digital to areas We're developing planning factory to commerce. in plan are future demand management We as profitable focus also such more investments a automation, growth.

customers said improved value. have drive shareholder market long-term to performance I deliverables clear they As designed while returns we simplify strategy, need to establishing before, giving and of our more what

are macro have Although, in in the gaining already not from conditions housing weakening progress. the from we across we we actions insulated momentum are globe,

an simplifying strategic our sheet. step XX, X. and important million. near-term near-term review, for resulting A$XXX a of executing in On most on taken April Slide our actions significant strategy we is balance strengthening number sale Platinum of completion approximately relates business, Equity One the business of our to was the our to announced this our and have Australasia towards seen we This

proceeds of forma to of expect net the debt-to-EBITDA by year. repay basis leverage debt pro this net be the plan approximately use on our below a We and US$XXX Xx end to million to

In I team addition, their tax the want we minimal our expect quarter. personally the leakage work. Australasia for entire thank continued to hard in and deal anticipate closing third

is an with active management have platinum closing relevant plan the We separation transition office on details. currently which working and equity

that Last quarter, see we areas foundation. focused And the three noted our X, we on are Slide work. key the you strengthening on for

notable amount tremendous will a improvements that and deliver have medium We underway the profitability expect activity term. we near in of

ideas numerous that run improvements it consolidating more are do teams sequenced. just through to are complex from and review then that projects Our a range process

improving projects base profitability, XXXX. that in in across some XXXX in These to SG&A. operations this our are few to incremental days helping are into our we've we are to in the improve early our Knowing provide drive a I lower costs taken insights already late cost activities wanted in actions approximately million early year and of the that of and $XXX

the we're system. First, our of improving out driving and efficiency operating cost

program we to and for as million North cost annual out America will logistics $XX a better system. This as network visibility implement to transportation well example, customers. in our we of us our program, started drive have shipment to optimize recently centralized of For allow us our improve that expect

and programs Further, chain management. we are enterprise to centralized leverage reduce order scoping and similar costs the sourcing that through supply

as people, commercial we as calibrate actions. targets as structure, sales include including excellence well as level focused are process Second, service details systems served. markets organization. throughout better Europe, on the reviewing efficiency our Expected pricing In country well end and to and go-to-market results customer we are

continue network sites to and to interior In to our production we closer business, we we optimize which reallocated have be our to production. efficiencies. production America's customers to includes footprint, execute optimize improving door how Finally, plan North and

categories. forward, anticipate such expanding move product opportunities As additional across we we

year, facility, towards which closure million another step about footprint in in savings Additionally, of Doors ongoing the deliver $XX rationalizing annually. expect January of this our of we Atlanta to we cost announced

cost reduction focused and examples delivering our As profit see on quarter, you can and from the we improvement in initiatives. these results are

on a I and improved performance, are to To come. look projects few drive sharing to to these quarters and forward the examples are in reiterate, of more working we the years

significant we opportunities years expect in out come. have As drive our Slide to and on we performance self-help we implement quarters the improved plans that X, laid to

are process setting actively We well-defined ensure creation clear them and targets to value of will accountability. in monitor with plans the

develop of remain these divestiture. pending are year a end forma plans, investment our by below we a of As focusing growth. on achieve which innovation Australasia we basis to to we Xx, of capital future on returns pro expect our the the completion and we and leverage reducing drive to includes allocation, this runway longer-term On committed

to prioritizing profitability. further are investing We also payback in strong projects improve

transparency drivers and help you to focus our the fundamentals business. of to understand continue we with finally, on investors underlying And

We mile to long-term goals. so are when to We're information and evaluate underway giving also with can you committed our goals appropriate along these markers more the progress developing our way. sharing

rationalize detailing excellence However, operating on transformation on laid we will out. have costs, actions our in the commercial is that focus plan footprint, and deliver already our our reduce our improve near-term, the large that

over I'll to Julie financial now it discuss results. detailed our to hand

Julie Albrecht

Bill. Thanks,

to for you results Turning XXXX. Slide XX, of see our quarter the consolidated first

expectations, earnings Australasia quarter driven subsequent end. As sale delivered a sales quarter internal that financial our and than results ahead Europe while were to was bottom our event our as results lower cost announced tailwind America the benefited mostly We More price of all the reminder, line a inflation both top in and was include of outlook. original results, better conditions for North that were cost specifically, volume earnings. and by a first our in market

Our levels. first quarter billion, revenue from up approximately X.X% $X.X was year ago

quarter adverse versus top sales had prior an growth solid year while foreign X%, the revenue line slide. comments was a X%. translation of exchange core when Our our additional cover I’ll next first I provide about impact the

adjusted X.X%. about margin improvement I’ll view Our With $XX In few this year-over-year adjusted drivers EBITDA in of a activities. near-term the EBITDA year-over-year of margin and cost million sequentially, our was provide more color EBITDA of a leading minutes, as our to the validation improvement. approximately reduction our quarter an we

of XX, offset Slide which by quarter first to reflects selling that increased added inflation. see the XX% second half prices higher increases that XXXX On sales you price to was cost revenue our year-over-year, in primarily our driven

mix with declined impact further translation. negative foreign a volume Our X% exchange by X% from

quarter earnings revenue our find walk segment including of in appendix first the You’ll presentation. the details

have EBITDA other Year-over-year, our improve driven productivity EBITDA approximately that gains for adjusted improved $XX partially investors. mix cost reduced realized by incomes gains. to XX, were bridge our On million, foreign we by transparency from offset adjusted Slide new non-recurring, volume a and headwinds by exchange added positive price and and

you we give As inflation a on what have I major more to topic, be detail continues want to experienced.

remainder driven raw of the we inflation period. was year, labor. driven quarter year first recognized freight $XX materials, to in prior approximately and of During the Of XX% by an the cost this total with energy costs this, approximately compared increase by million

lower our expectations, inflation in in total line labor mostly material North and freight with experienced outbound rates energy, were in Europe in our While America. inflation and in we

our to up results Moving the ago generated North of first from In quarter, Slide segment sales XX. America’s X% levels. segment million $XXX our year on

XX% segment points XX.X% margins increased of up $XX Additionally, XXX EBITDA year-over-year, results. price to million, positive solid while the by basis adjusted a had driven cost

and and bottom all While demand mix was America’s improved market of our top conditions first better sales than line were supported quarter year-over-year, expected down which year-over-year, North results.

delivered impacted vinyl a VPI wood and our hour. to weather year-over-year business. as inventory North being window experienced an labor meet the some units Specifically, demand, in Canadian reduction quarter performed interior levels. operations to windows, inventory both Meanwhile, we doors, flow standardized per with processes Coast first of number cash positively did and the data from affected more improved implementing reduce operational include market. improvements our in West LaCantina negatively We’ve America. well driving and softness proactive to improvement Examples efficiency These in results flexing improvements driven and market X%

EBITDA due partially in was line positive Core Europe revenue negative exchange of the by EBITDA. year-over-year, basis XXX and X%. foreign offset higher cost by And productivity XX%, a improvement volume quarter had Europe gains. and of million adjusted price price X% EBITDA addition, Adjusted of lower in in mix leading points increased driven from top higher in impact XX% margin translation. revenues $XX of realization generated $XXX to million to

During conditions continued the most of across quarter, macroeconomic from Europe weak suffer regions. to the

country. construction New residential depending on are XX% XX% the rates down to

from market despite volumes, productivity we delivered had the have And headwind have lower from focused on capture in Europe as savings. certain improved share labor to struggled initiatives addition, and both operational the serve in to customers. opportunities material region However, excellence suppliers

reporting million quarter $XX first results revenue solid and of EBITDA adjusted million X.X%. had $XXX with at margins of Australasia

segment to of the break of result out final our we move operations our this discontinued quarter within a the business, its As and will segment the continuing Australasia announced detail will sale be operations.

beginning of exclude XX. market and Slide updated very to expected remodel in outlook turning declines our interest rates is year. on at new we impact and XX% We’ve continue the North this Now expect similar it the single-family outlook what to permits, but repair year-over-year, as to In to at to higher America, well high-single-digit activity a a starts mid and we construction to XX% of Australasia, rate. decline as

for for volume with in business, outlook combines in expected an our reduction this North February. of America discussed All low-double-digit we consistent the

Europe, that to also we macroeconomic demand our ongoing the down will due be challenges. is soft market anticipate outlook, In which consistent as with previous the region’s high-single-digits remains by

or in may Commercial is the are a but Construction declines of be projects new in the impact current continued, on on which there construction markets, delayed to flat to country. projects near-term. On is medium-term. evidence in side, of commercial XX% depending expected number being that construction we hold see residential the in new demand XX% has put on residential the

On year outlook we EBITDA. adjusted and XX, XXXX for full updated Slide provide our sales

results divestiture a outlook in appendix while reduction activities, and our accounts of from change. earnings Australasia guidance impacts updated that our presentation first continuing the the how slide ongoing for segment the also than We’ve quarter included our Australasia stronger shows Our anticipated our operations. removing cost

to $XXX we When and expect midpoint the February, so billion of XXXX in $X.X original prudently environment. $X adjusted remained now our and full we cautious EBITDA be revenues between from raising be million. million the guidance year to our EBITDA continued operating gave given year We Australasia outlook billion and After uncertainty are between we were continuing the removing million. adjusted operations, by we $XX full and $XXX in

turning Slide XX. to Now

for year result how discontinued full of guidance, quarter year our remainder our You segment XXXX outlook in can our with Australasia as results reflecting see again, our this first to updated a operation. combined the

comments my quarter were our mix in this volume I’ve price As our first cost expectations. than described better morning, and

However, we do outlook with we original of comfortable based balance for remain this our the today. on know year what

X%, to our I’ve price carry by forward in driven that reflects down demand is described, sales revenue offset expectation updated realization. guidance core Our the X% partially low-double-digit that by reduction

price XX% the through savings new impact offset detrimental guidance to as cost versus split at in expected EBITDA as excluding actions, EBITDA strong and the volume half our be anticipate of quarter results half roughly drops margin. well by headwind mix, original cost this and to second Australasia, which be we slightly improved equally. XX% ongoing revised now to a Most the is from lower Due guidance. earnings first reflects Our both EBITDA productivity first and to and

shifting flow results. cash generation improving We flow. on Now to keenly cash focused over XXXX remain our our

generating each more reducing continues on capital million half our networking this plan focused segment reduction. work at to with than to quality from on earnings, addition its $XXX In high of least inventory by coming actively action

Q&A. move to James to over it turn now to I’ll

James Armstrong

Thanks, are Q&A. now Julie. Operator, begin to ready we

Operator

from of comes line question first the with our And Lovallo Instructions] UBS. John [Operator

open. is line Your

John Lovallo

Good taking morning, for my you Thank questions. guys.

how the programs that place, cost First realizations the cadence of of one bucket. million that the the was in timing also $XX to about from is, the of of attributable And think million the you so first put sort should it realization appears saves there? $XXX we

two the buckets out? split how second curious of Just sort

Bill Christensen

Yes.

can detail. some So the John of thanks. go Julie into

transportation in we gave but America. XXXX, rolling couple talked in call, systems remarks, is QX the into additional We this a obviously last of things examples the prepared around North measures. which the what a year, of freight some is closure, our doing we today As we’re combination of the Atlanta in forward also and managed started

the are that obviously So will realized are impact being speak as in and have we an year. things those

can talk of buckets the more Julie, and of kind through on the detail some that. of

Julie Albrecht

of half million. first and $XXX Hey, the as far Yes, question part I’d the the that say sure. like half John. first second Yes, probably as guess between well, XX-XX to I back we’re of your phasing,

XX-XX And and quarter comes perspective. we’re to and it I the delivering think So well half three Slide that’s SG&A from boxes – to at it’s QX leaves say that kind million improving when then again, second a X, cost of two, XX% year. the the roughly it sold roughly goods $XX then an in looking you’re lower of probably both as and as expense of there. I’d operating lower efficiency, comes when

the closures evaluate, year-over-year year that we’ve potentially last the year, already wrapping that benefits we’re then the in again, and And leaves, things from optimizing the site action network things this and the between of to second in of up this then continuing announced half year.

roughly, All say of of reductions. that foot work, that network I’d footprint again, is around the XX%

John Lovallo

there? Thank then, about And helpful. what about I What’s those thinking wage two about to in peer, quickly how guys America? And the you’re growth That’s a is there Okay. on there? markets than good your of then, in costs guys, benefit just how So as you’re and you from Europe, latest given which benefit about exposure still and should up customers consumer. the your you actually held kind North better construction be talked you’re curious thinking consumer there. your given builder consumer declining energy new you. hearing U.S. mean, spending pretty could curious the

Bill Christensen

geographic are a I’d progressing it’s expected builders typical very obviously, build so there’s you building views. region was summer but John, mixed America. recently through North a and I’d in starts different in picture. benefit of Yes. obviously America, that say cycle, demand expected, I the see strong there’s Southeast, North the the say as to

at reasons. a standpoint, Just still couple when around there’s we a from look it caution broader for

homes general. issue in an issue of also an one, and Number is inflation is affordability just

the of clearly that forward North views to stay reflection market things is adds point challenge. are, third and of see how out that on some affordability about thinking the America. things We rates rates, kind significant play they purchasing where they are mixed there’s And this back interest in of and think how views in when pretty more people in is creating will rolling half runway the homes, the I start year the will one the we on have creating that higher which long on

not year. remain is, what clear cautious, view. to down and mixed. view XX% since So beginning changed of one it’s There’s is that We our the XX% hasn’t very the very

Europe higher Europe, a there’s rates that different, can will significant there’s is so still and interest go risk still inflation. in

or think in there time. just period the of are has for inflation sector you the of about which double-digit building lot certain labor and inflation If European Eastern been countries, delivering a products a into product that’s

down Europe as Northern in starts see much XX% we or as So XX%.

step to a out the decline. some the sight So turbulence really the figure unfortunately the really no Europe shape, when and ending for markets to consumer a There’s in while and are in take in Ukraine. back going bad it’s pretty to will take conflict

and news. than Energy headwinds is good which costs are softer expected,

we off summer, to to gas reserves. shut start in year However, is the Russia this remember and European the last need needs when now reloading the Union

an So as additional needs on potential and gas be reserves the to energy there’s reload also the expected. progressing that threat

lot we’re a and general people So I that cautious in think are and waiting. uncertainty, there’s is of sentiment still the Europe seeing

good are is competitive. the period. commercial pretty getting pricing The projects the gestation is as projects, those activity there’s around a Julie more the still finished acquiring long that noted, news and because are fewer projects new But being

year. very for So in we the back of cautious why also remain the that’s Europe half

John Lovallo

Thank you, guys.

Bill Christensen

welcome. You’re

Operator

And the Sachs. Maklari line comes next question the of from Goldman Susan with

is open. line Your

Charles Perron

Perron today. in morning, this Susan Thanks Charles Good my taking for everyone, for is questions.

Bill Christensen

Sure.

Charles Perron

the maintained out conservative Have volume market? Europe more obviously than it our change year? of balance any guide volume unchanged be maybe uncertainty leads despite were. your quarter given what for Or expected on the mixed First, that like expectations you and the seen America in the more – versus you better is there you North I cautious first this to

Bill Christensen

in We in for question, on I building not kind at North this of additional sell-out the the actually of think volumes, looking at said loading the limited on we’re de-stocking. channel just in summer John’s of I this horizon in especially question point summer based that are Yes, is and yet. so seeing And inventory seeing some R&R time season, clearly in where would America. Typically expect we is retail the build. kind pre-loading we’re rolls R&R into when seeing we’re clouds the what during

credit to there, And challenging we’re going remain There’s a seeing, that signals environment. a still obviously that it’s believe would out of us cetera to savings, retail be lead that cautious. partners bills, pretty rates, et spend lot R&R card pretty

kind So have we single support our reasonable, and mid we’re high that. that signals feel expectations is that of digit down would to seeing very additional

in that’s expectation So two remain next, our for quarters say a year. I’d this half why cautious the we of and

Charles Perron

for system That’s up change noticed following in just the stress you helpful the R&R have specifically? And banking how the mentioned. from versus Have about market you the the point projects, paid last in And windows much then sense market? tone access financed cash is channel Bill. over your of color, a any solds door also how partner more product And end month? for this and do for financing end are important your the you this for on basically

Bill Christensen

Okay.

macro banking understand mix So guys mortgage. maybe the we cash I to the probably us You or the between retail over I last are, that. too of from that kind into want kind know. and of view financing financing has layers on predict to space? to And rolled hard There’s are comment than a so to wouldn’t really point, us for debt don’t turbulence many on it’s closer the a versus what’s of the install

typically not a cautious we’re stay ties just is for they’re high, macro retail still I Inflation are are a And environment. affordability to issue. sticky an a partners rates that say seeing that Interest into is that. while. going the challenge, season, I is and build think summer

don’t see any or we direct impact currently. So correlation

Charles Perron

Thank you time. for the

Bill Christensen

You’re welcome.

Operator

the with from comes Matthew Bouley question next the And Barclays. of line

line Your open. is

Matthew Bouley

questions. for everyone. morning, good Hey, the Thanks taking

Bill Christensen

Matt. morning, Good

Matthew Bouley

Good morning, guys.

result we down it’s the of, so better X% I sense And that? kind operating did potential that than be Thank question was trying QX, about forward, just we to in spoke a the better what just upside a America, go genesis model of downside expected. or the and mix, environment the the as we’re I us what out think is, of we get as of difficult year? wanted volume North to out most could obviously through build there, So a my drive Because out you. the figure as

Julie Albrecht

I’ll start that then some mix. have can Matthew, did and Yes, my from North sales impact I morning mentioned comments America in a positive color. Bill this add already

and volume were by, to below still when X% comments it better And look X% I X% like had in it expectations performing in positively more mix. call true so down, they was bit quarter, some VPI, expectations. strong a little we quarter mentioned our our X%, their pretty than decline, at for my impacted lines from QX of which the wood that LaCantina, windows, but products was stronger

that, And volumes so we of deeper, mid volume unit little I were impacted kind to at get think net when down to you to you look digit X%. they us but in dig single when that that it see dollars, and upper mix positively by range, do down call a just

Bill Christensen

And responsibility times to about and talked authority Matt, in just a of We’ve number more pushing of we’re what a business. really broader level on down achieve into trying let something here. add maybe on lines me

and we and where layers in where our Krause Nigel areas a not team think we’re performance areas But Europe are to identifying his actually seeing we’re his Dilks of And couple into maybe also in that America, level competitiveness we’re require. pockets down in John team really starting at get strong. So is North organization. a we the

Julie’s it. wood pretty are an And is think To where windows we and the to areas we And I wood make we’re something in we doing area is some know struggling. this good how point, window how so players have, lead appealing at now, we’re where right all other exceptionally the well, of market the saying, currently, times we’re right, do that strengthen well? and

want those to force really we things. So

some drive organization with us of gives lower growth how identifying really the start things the the push everything can different that door. really So profitable regions, on the the to focus we to getting ability in our want they not that and just what into out is teams and this

Matthew Bouley

you that helpful. Very Got it. all Thank for color. All right.

from Dip] Second taken of that model one, the over the of how price Dip] majority at year I’m in the taken, half should actions XXXX. the carryover curious second [Audio and think the we quarters. of pricing through this the flowing was about of of additional result perhaps beginning pricing sort [Audio the next three

Bill Christensen

of And specifically for Matt, you’re that the at repeat you clear just us, dropped beginning Can so you just your asking? we’re what question.

Matthew Bouley

that. about sorry Yes,

it spent, the So from over pricing know this there the balance of year? price and I’m think beginning was of year. said of the pricing curious we then do at how XXXX, I about the if you most additional taken was

Bill Christensen

Yes.

from So and there’s XXXX if had you XXXX into was – so our remember. as carryover QX it signaled we anticipated on call,

But actions. have pricing we’re quarters dropped is Almost in And actions. through starting new pricing pricing coms details where commercial the is what’s thing, side to make on was to visibility, in segments, XXXX the carry look going second of to more sure feel number to starting countries, number two data specific we’re we what position, in but one right we’re doing from price. excellence QX the at side. the the with very into the we’re just and get pretty on that we’re obviously tough the with there The all limited specific

through half at So of of that’s back we’re need to the kind the think looking also when you something year.

Matthew Bouley

Good All it. Bill. Got Julie. Thanks luck right. guys. Thanks,

Bill Christensen

welcome. good Matt. Have you. You’re Thank day, a

Operator

question next with Group. from line Steven Research Thompson of Ramsey the And comes the

Your line open. is

Steven Ramsey

the in the into about move. a portfolio Australasia that the taken far benefits Hi. segment. about clearly talk and from Europe quarters second how seen couple Good you morning. Maybe half? talked the had moves talked And of so in you builds big past you pruning, pruning some Can you’ve about

Bill Christensen

Yes.

right So to had strategic things divestment. we a really support with that obviously partner wanted sure the to make one review, couple was continue the we we the and with Australasia carve-out. Number strong that was to the wanted achieve growth there

wanted who’s in our to back Number understands that, strengthen we we half in So two, we in we this and wanted balance once partner which the and a close found the have sheet, we it QX. feel of which Platinum will we delever achieve transaction Equity. done year, I so think to

on to Europe, believe the and we focus opportunity point, third so do And that’s America obviously and core lot there’s in things we of remaining differently two regions, our and those want a better to North regions.

the that doing So year UK, say and to I’d sites some in smaller closing of already big window earnings. related, a were and in we which about drag things last talked Melt dimension, some we’re

So those are closed and concluded.

our closing We’re have Atlanta will closing an that in Atlanta our of facility and we’re the now process impact.

that ahead asset us broader investment serve to levels the we’re So our we we’re taking help foundation footprint right the the we base some the sure of are right now how do to the of that road going make strengthen and have actions and more focused with customers. on of kind

in said North John these make And that before, logic sure us also sure to of need down areas into letting improve we’re to that pushing business to they the do have Europe want Nigel with America, business to we those of fund to really make the of because together I in improve, to what line owners need are clearly we improvement capital do available projects. know we the

for to key balance going that’s focus be delevering addition to a in so us sheet. our And

return projects make this in year, want we're flow attractive going to pretty invest to generating, to but profile able that the we're are going We're free what be next. that to also cash sure

Steven Ramsey

And already Helpful. lack retail the you there that the guidance talked thinking how and that of stocking they do in embedded is guidance the about then thus Okay. inventory they Or like restock? year? about to of far. not North rebuild America And channel about restock effects similar, Is degree? the distribution through the retail point you Do inventory. start that think Will to think channel some hear how in run you greater some to channel. at curious inventory a that

Bill Christensen

channel monitoring single-digit America. we've through it's the we North mid is to different last in it this lot answer of longer we're the short but watching the We've There's high of guidance night. whether is, of gone you clearly, or baked closely, cautious. in answer. into The R&R Europe be it That of shared that So a is today, baked down. topics number the Clearly, remain expectations and uncertainty. a kind all with

good focused feel So and I we're control, pretty off we're really can doing QX. coming what effectively on controlling we of a job

are any year. that back it of for Regarding and half inventory, expecting significant be our down the the matched to not of distribution what we're changes would expectations feel kind volume in

we have homework we demand or we of see where our labor in Of stronger balancing, and factories kind weaker demand. to obviously, are on course, do, depending loads

John, and balancing of cost Europe good So job quite remains doing a North market and which volatile. to in of America reality, the are Nigel kind

Steven Ramsey

Thank you color. the for

Bill Christensen

You’re day. a good Have welcome.

Operator

Our of next the with Rehaut Michael JPMorgan. from comes line question

Your line is open.

Andrew Azzi

the back and This for about could on you does and between your April Thank and the you details Mike. the Hi, Congrats everyone. growth if in then the quarter. sales half? think taking I my for businesses quarter channels Andrew maybe that retail provide help sales is ask maybe to questions. more in trends just Azzi wanted on in quarter on any between how and traditional us next

Bill Christensen

is we during QX, the the to of We than expected as we construction through back talked were kind we're expectations. price for better cost to America. controlling XX% new down on that I we're would Julie those coming that the thinking we're costs Obviously, topics mean, that little guiding. XX% year. where has and So a in North

very for make us tough more basis So a it's quarterly just detailed to a tough because on guide a environment. it's

we're something on we've R&R just have are because, that's but the watching not on that that and economy growth. shared carefully And strong We I some do North us, in general we here. obviously, that, clearly, impact, cloud big in on seeing of will are a pockets that see retail the think America,

region. clearly about to roll. talked about talked the windows. continues We wood building, We Southeast We're

said and quarterly very we between in our it's what detail the for I through as So a kind more of XX/XX construction. R&R we've Hard volume, talk kind us of to mixed mixed. basis mean, But past, it's in new see. on

feel year. think on the end good of where kind pretty a give should that we'll of up So at the end we

Andrew Azzi

the speak between you And that. customer by? any stock as anything could year change And shift expecting or you're seeing? the you mix for bit Thank a that little you're then goes noticeable to

Bill Christensen

side. on I'd significant say mix nothing the

the we're pockets are of with progressing. where happy We way extremely have things business

multifamily a example, strong still not have topic, that's we think For I but a JELD-WEN backlog, homes, market topic. a necessarily

So solid. that remains

XX% between projects Residential struggling of in European built ago Commercial the being to and and residential and are commercial. Northern is of world a that Within what coming times a of good think or area commercial in continues as know, certain we and released as still there, to out very be traditional, we're In also it's to compared Europe, pockets, market pretty lead to the we said, XX%, XX% for down promising two where are we a lot the windows side, retail place reality more the a down, year wood the us tune our significantly, is of is. a seeing years were completion. mix markets.

We do tightening. see pipeline the

expect optimistic the why we and there remain more to than also also to some in market, that general into now European will as need cautious in the create the market of say, So uncertainties where that's feel are, the that could because back signals year I'd additional right half we go. headwinds we commercial

Andrew Azzi

luck next for from me. Good that, the quarter. you Thank on all Bill. That’s

Bill Christensen

care. Thanks Andrew. Take

Operator

comes next Phil question line Ng the of with Jefferies. the And from

Your line is open.

Phil Ng

really guys. Hi, a on start Congrats to strong year. the

Bill Christensen

Phil. you, Thank

Phil Ng

seen the up cost least at R&R America price Can relatively competition you on and inflation on are job, called cost out freight you you you has then what guy. pricing at kind color incredible guys And been on You've some carries any inflation, the good shaping the certainly you're you how things any thinking about thought how of how size a retail. year highlighted an and of So it's have in energy point? the side, up Julie, kind side this North on uncertainty progressing? coming did the via On and side, May, increased price through side?

Bill Christensen

Yes.

jump – Julie price maybe Let into take the the me inflation. side I'll ask I'll to Phil, and

coming things bid price, projects and I are this changes the not competitive think What of and we any pressure. gets We're have where the see, as expectations market is a to on I is market short to normal, answer so mean, greater our no. do into are tighter, So the kind tracking. seeing the significant going

that to need we margins. careful we're be that taking appropriate So deals very the have

our on can of back of some being the really we delivering be And we strengthening win one that's we're vinyl, and we're window working there great projects, we're is we on volume we on hard but proposition. in selective. Coming line, And and reasons significant our vinyl think wood cost value competitive have kind structure why make area. of value sure the to a in foundation to strong is the said, the so business, price against focusing pressure and wood in as

and as doing hand But it cautious to being to I'll the there. we're over careful on what really inflation. we're Julie So

Julie Albrecht

that in be and lower good we Europe are spend. Yes, smaller And noting, story inflation our at those and definitely again all-in in with expecting sure, especially below was inflation freight first quarter by highlighted the morning, Bill. were around to expectations. the came and this pieces around a energy that it's energy total Yes, well X%. new in driven XX%. But of we outbound our lower however, I mean, initial relatively We the

But nonetheless, XX of an expected items those basis. actual X our two brought to down kind from again

year mentioned that So all-in, XX% February, we range. in I in to think our be inflation would I thought X% this

our a like energy, freight driven back as Again, about to and a still in looking that's outbound But regions. still year. have macro has QX in this a that's of we're the nonetheless, these little saw X%. trends that more bit for And in dialed and environment at so what talked today, by where uncertainty in X% already to core what we're we mostly and be – lot we although Bill lot

Phil Ng

and guys. the to the of this in deployment you. there's beyond, core capital standpoint Europe products Bill, and America to kind where forward? clear a areas through want bigger How you're core work When to kind you That's leverage going to and Xx you to what color, keep are we forward, is you to you. XXXX from want about more under And and standpoint void opportunities do great pretty it's But talked forward? North you core want where invest to going see from clearly, of end year. of a And you any you And by core and that that return wanted of there you get priorities? going what's then growth and get a are some

Bill Christensen

capital if allocation end feel the and debt Phil. need We Then Xx, we debt list, the way. Yes, math to we of to the to going and following of repayment is we're top clearly the we view foundation. that thinking Clearly, through below about by But is in ourselves, appropriate. be get need to we our We're pretty Xx we've to the so investment we around aspiration. solid. which shared our go think to and the need of the versus invest kind balance repayment strengthen year, can in

we get lower are capital do the market of continuing just we back on not homework is decline. leverage the the silent the will but list to as capital. improve structure ratio a EBITDA, for some I of but We're go market on and us mean, Obviously, have do we repurchase we the – for clearly share looking available to we're through kind screen the priority actions into we here, when bolt-ons. before

play, we're think where are these we the to organization. now about want with how we that win, If starting want the we discussions to

the down creating So pushing clear is doing of lines visibility thing on we're and business. we're the first

portfolio. with European really do Second we're how the we a they developing working and understand And have the know, we see that their together to North team is American portfolio. as broad very

lot we opportunities. fantastic of a So have

is clearly the appropriate at go of really and them and opportunities innovation those pick to need we with allocation view that some pipelines. capital resources, Our

we're a on. be of to strengthen and things leadership them. we're America is core going obviously, as around we're seeing those It's funding our challenge what detail sequencing in specifics. and and early each working areas, that the that's great doing. really too of two North of businesses the Europe, line really share to team a But So to lot And and

Phil Ng

focus. guys you hear, to Glad color. are narrowing your great That’s

Bill Christensen

All right, thank good day. Phil. Have you, a

Operator

line [Operator Mike Markets. Instructions] with of Dahl comes Our next from Capital question the RBC

is open. line Your

Mike Dahl

Good morning, thanks my for taking question.

Bill Christensen

Good Mike. morning,

Julie Albrecht

Good morning, Mike.

Mike Dahl

still is look take different back I market question on step First guess structure a is I and there. at the when Europe.

kind and the already say, that actions of the at this right looking You've core back been absolute the I at an the basis take this now about your look point? years, at is the profitability talked of another even current last You've risks over really five hey, capital anymore? jettisoned for not some with pressures, you're restructuring and ahead. at the our on taking, mean, I both relative isn't maybe business look it's why If you're here. Why to strategic place Australasia. Europe this a lagging

Bill Christensen

the question, for thanks So Mike.

close. So clearly, Australasian need to we're signing getting we we've to that key things a able agreement. achieve simplify two these been by obviously, we the need to of are anticipating, and and the delever And

will that big So be a us. step forward for

we at question. on both some There's be Europe. chair, strengthened. markets. And And three need leading Europe, the in we to leading If have no we legs have two. don't we brands have look them

we strong a does do I there, So as And more. our can we believe, have very a team platform. lot

into, the working of streams, cost is that we're clearly, the plans, we now the level through say, lift, achieve So to a profitability to the appropriate. I'd ourselves work get feel

we and with of a the options. viable in and great what have are our clearly, to North brands baseline and good really markets that for And And local the again, platform great have, after bigger-picture of strong we then achieve think portfolio kind first, America. teams. that's But we need to also we we'll deliver the plan really assess

and we doing want we and in prove haven't of of that the can focused job to control. really to done a self-help we're what great capable we delivering. we're the So And that that's capital personally and I what on controlling believe past, market that

Mike Dahl

My provide to you comes fruition be thoughts that process? say That's given Where helpful. still question, but an on you ultimately allocation what Towanda, process second capital would when update. stated think pay-down? that And you That also about we always that can Bill. know Just funneled targets, that, has also Thanks been debt any capital on received limited you're just can your dragging towards I out? do about, stand? should kind we of Okay. that

Bill Christensen

Obviously, divestment Unfortunately, to in the no court order I'm a shared currently. past. in we soon question, currently, market, new appreciate and an process, say Mike. is we process to are That's will of the detail have not as active this on share report, a anything more as the I the we've news do more divestiture. as Towanda position to that's we that. with outside relevant where It's

Mike Dahl

Okay, understood. Thanks.

Bill Christensen

good All you a day. Have right, Mike. thank

Operator

Truman from the question with of Research. comes the line Wolfe And Patterson next

is line open. Your

Trevor Allinson

for Hi, my Trevor Thank taking is Allinson question. you on. this

target? million like talked one, just that reducing $XX million take update previously, down made you progress I on had from that $XX just you at about to inventories First think XQ. is still in already, Looks pretty you least you've wondering or where some any if further by at if guys you're a good good going

Julie Albrecht

by working remains $XXX still we're during outlook roughly of Yes, – lower kind our capital this year. million

part a that, generation. are we say So key just of that is inventory. and still And XX% roughly yes, a our of I'd from lower targeting of inventory flow really big cash adding a part

lot of have still start along lower a year-end of generation, pretty seasonality did we year. slower start capital of kind tend does for really But track. to to including capital. A A one we the activity, the of mean, year, there our QX but solid working is priorities cash reasons. lot typically. coming the on I So with of as working out improvement top yes, profit flow various build

Trevor Allinson

Okay. on VPI. a one and Thanks for that. then Auraline And quick

businesses ramping those throughout are guys XXXX. You

America provided basis what maybe year-over-year those you're Just provide on North in expecting in from a in benefit color of XQ what on those any businesses? kind or XXXX

Bill Christensen

Yes.

we're progress in. of the we're of plants one ramping. here that a weeks just the putting back lines was to few in our So see I locally

in still the ramping of we're So up. process

is very a have of have we and six We months out in. pipeline, robust we're locked kind where visibility,

growing So like today. piece that rapidly it's small Obviously, a business. we to we're continue the really

we of on size. So kind details won't share

we an very rate it's the growth like a a But and of market, interesting in lot. over-proportional area

currently that. So good multifamily we're position going dynamics to continue to that serve growth just the on a and are good market based

Trevor Allinson

Good upcoming quarters. the luck Okay, you. thank on

Bill Christensen

Okay, thank you.

Operator

no are I'll questions call further to back time. Armstrong, this you. there over turn James And the at

James Armstrong

Thank our today. call joining for you

If questions. to you out, our any have questions, day. answer would call please have be happy your This great I please of any follow-up a reach ends and

Operator

And this concludes conference call. today's

may You disconnect. now

JELD-WEN Holding (JELD) 9 May 232023 Q1 Earnings call transcript